May 3, 2012 224 comments

Reader Case Study: I’m Rich and Life is Perfect – Now What?

These reader case studies sure are fun. First you get to engage in a little voyeurism as you peek in on another person’s life. Then you can actually compliment them, offer advice, or throw out a few Mustachian Face Punches as you see fit. All to a real person, and all from the comfort of your own office chair.

Because of the popularity of this series, I’ve tried to mix things up and share reader stories with widely varied situations. We’ve had everything from Minimum Wage up to Big Law Firm workers. But in general there has always been some problem that needs to be addressed. Massive student loans, cars bought on credit, people hoping to save for a house, or people trying to find a way to quit their jobs.

There’s still a category that has remained untouched. But when I think about the essence of Mustachianism, it’s not a rare situation at all. In fact, it’s a situation that is many readers of this blog are already in, and most of the rest will eventually get there.

The situation is of course having a great life with no monetary problems whatsoever! But there’s still an unusual twist in this one, so read on:

Dear MMM,

…

We are young couple (early thirties) with two children (early teens). Through a combination of hard work and good luck, we are very fortunate to have healthy finances. We paid off our mortgage, student and car loans off as early as we could, and our only debt is a charge card that we pay off every month (in order to earn the rewards points). We have about $1,000,000 in assets: we own our own home, we have savings for college, our retirement is partially funded and we have a substantial buffer for emergencies. We spend a very large amount, but still save between 40% and 60% of income each year.

Income:
Me: About $7300/month (after tax, health care and max 401k savings), plus about $300,000/year in bonus (fluctuates depending on business success).
Spouse: $0 paid income, but works a heck of a lot harder than me!

Expenditure:
School Fees: $3667/month
Misc.: $3250/month
Travel: $2500/month
Food: $1500/month
Children Activities: $1500/month
Summer Camps: $850/month
Social: $700/month
Car Repairs: $475/month
Legal Fees: $417/month
Charity: $417/month
Car Running Costs: $300/month
Insurances: $300/month
Phone: $270/month
Dog: $200/month
Cable: $200/month
Water: $200/month
Dry Cleaning: $100/month
Power: $100/month
Security: $32/month
Gas: $30/month
Total: $17,000

Items in italics are the emergency budget: $3179/month.
Annually, we earn about $400,000, and spend about $200,000.

As I said, our profile is quite different from the average. Our expenditures are very high, but here are a few caveats:
– About 40% of our expenses (esp. school fees and activities) could be considered “investments” in our children, their education, skills and hobbies. (my wife gave up her job to take care of them full time, I spend 1-3 hours a day with them, they do lots of activities and are fortunate to go to an excellent school), and they are 8-10 years away from being off our payroll.
– We have structured our bills so that we could quickly cut down to about $3200/month if I lost my job – a level that could comfortably be covered by savings and my wife returning to work.
– Our expenditure is funded out of past income: no way would we be spending this much is we had debt.
– We spend primarily on experiences and not on stuff: our house is small (about 1500 sq ft) and our garage is empty except for two cars (average age, 8 years). We are not people who buy lots of expensive toys. Instead, we buy expensive holidays and activities.
– I enjoy my job and my life: I am in no hurry to retire. If I did leave my current employment, it would likely be to do a similar thing for my own company.

So, what do you think? We could obviously spend much less and save much more, but to what end? We have no debt, ample savings and I am not in a hurry to retire. We enjoy the things we spend our money on, especially the children and the travel.

It is a very pleasant dilemma, for sure, and we were wondering what your thoughts would be.

Well, that’s an interesting one.

I can’t really hound this guy for any sense of whining or entitlement, since he has acknowledged that he spends a lot and has a healthy attitude about it. But it’s still a shock to see a number like “Bonus: $300,000” just slapped onto the end of an already gigantic income statement. So where could he improve?

1: Figure out if You’re Missing Anything

I suppose my first question is “are you SURE you aren’t missing out on anything by living such an expensive lifestyle?”. I will not question that you are having plenty of fun right now. But with a budget so large that even your “Misc” category is 50% larger than my “Everything” category, it is certain that we are living very different lives.

When you live a life like that, you’re probably spending very little time doing things that are free. But as I’ve contended in the past, many of the best things in life are free. Things based on using your own body to its fullest, and Nature.

I’ve often said that my own family couldn’t imagine spending any more than we already do right now, even if we had way more money. In fact, we do have way more money, and yet we still don’t spend more. So it is possible to lead a happy life on less.

So why might you want to do it? I can think of one big, great reason:

2: Break out of your Comfort Zone at least Once a Week

To live life to its fullest, you need to be challenged. With a job like yours, there is obviously plenty of challenge and satisfaction in work. But with no need to be efficient with money, you might be missing out on golden opportunities to expand your comfort zone. Do you ever travel to non-luxurious areas? Camp? Hike to the top of mountains? Walk through poor areas in third-world countries? Ride your bike in a blizzard or carry your groceries home without a car? Difficult things make life exciting and worthwhile, and with too much money, you might miss out on precious difficulty.

3: Are your Kids Learning about Scarcity, Hard Work, and Struggle?

One of the worst punishments you can give a kid early in life is the reassurance that they will never have to be careful with their money, stay up all night to work hard on projects, or save for their own retirement. I believe that people do best if they are forced to make their own way in life. Sure, you want to offer love and practical and emotional support.. but cash handouts can often backfire.

Also, do your kids know how unusual their situation is? Will growing up rich affect their ability to get along with people who had less wealthy upbringings? Are you dooming them to lives of hanging around with only big spenders, meaning that they’ll end up very poor if they don’t happen to choose careers that also pay $400,000+ per year?

Every young adult should be able to comfortably sleep on somebody’s floor, drive an old manual-transmission car with rust holes to a concert, and eat leftover pizza for breakfast. Without complaining. Be sure you are not creating any new Paris Hiltons.

4: How Long until you’re Covered for Retirement?

To support $200,000 in annual spending at a 4% withdrawal rate, you’d need $5 million in savings. With only $1 million right now, you might need to work for about 15 more years even if you save $200,000 per year until then. As shown in the Shockingly Simple Math post, financial independence depends solely on your savings rate rather than your income, and my own savings rate was higher than yours through my late 20s even though I earned less.

This might not be a concern since you like your job so much. But as a cautious person my natural tendency is still to suggest that you place a higher emphasis on buying your freedom first. With an asset base of only 5 years of spending, some would say you’re jumping into the high life just a bit too quickly.

If you experiment with living a less costly life, you just might find that you like it more, and you have less of an interest in spending so much on yourself. Since your urge to work and produce will be unaffected, this naturally will increase your interest in spending on others and the betterment of society, the planet, or any other causes that become important to you. Then you open up a whole new area of life satisfaction – that of service to others. I know, it sounds crazy initially, but it has been know to catch on for many ‘a’ rich person.

The advice above should be viewed as just some friendly knuckle rubs rather than any sort of serious punching. I’m glad you’re doing well in life and you’d be fine even without lifestyle advice.

But from what I’ve read, I see an opportunity for greater Badassity in your life by finding a way to bring back at least a teeny bit of good old-fashioned Hardship.

Previous Post: The Cost of Living is Too High These Days, Waaah, Waaah! Next Post: Wow.. how ’bout that Comments section?

Want More?

Jimbo May 3, 2012, 6:23 am

Wow, first world problems, eh?… I would also suggest tracking of expenses! 3250 per month on Misc. ? even if you don’t care for the money, the potential for waste is ginormous… And I dont like waste. It kills my planet. But then again, that applies to the whole budget…

Secondly, with such earnings, this person actually has a very small net worth… Investing a bit maybe? Buy some real estate, ensure some income for the rainy days… This is easy stuff.

Reply
- Emily August 14, 2015, 7:11 am
  
  3 years later, where are they at ?
  The case study does say that he has a 1-year plan if he loses his job, living on savings and with the wife finding a job. Many high-paying jobs and big bonus-jobs are very prone to fluctuation, and reputation etc… So losing one’s job can be very hard to recover from.
  A much bigger safety nest would be better (plus, the kids won’t suddenly need less attention from their mother, I don’t think it is very fair to “make her” take a job if you lose yours (I’m a working mom, no-one makes me work, but to balance a huge spendy family budget like this one, is a lot of pressure to put on someone’s shoulders. Especially someone “out of the market” for some time (kids are teens).
  — More ‘stash needed
  He then says he could have his own business. That is way more risky than being an employee. And starting a business means investing. You can be savvy about it or lucky too, but some freelance consultants or small business owners work 1-2 years before paying themselves.
  — More ‘stash needed
  And yes you are pampering yourself to the point of needing pampers, man. Good for you for having a small house, not-new cars, but 3000 misc spending and 2500 per month on vacations, and 200 on a dog. Come on close the windows your money is flying out too fast !!! and you are consuming and littering the Earth with your spent items.
  This is my planet too.
  So after you bring down your spending, build your ‘stash (emergency, then safety net (FY money), then retirement), help your kids through school (let them work a little too), maybe after all that your career won’t be so apealing, maybe it will.
  In that case, if you don’t know how to meaningfully devote your income, since all is covered, perhaps you can help other kids through school. (since kids seem to be a priority to you, all with private school, summer camps, extracurricular, and even a mother dedicated to them !!)
  
  For example, since your kids’ private school budget is already inbedded in your spending habits, perhaps after they graduate, you continue to give that money, to public schools, or as a scholarship to your private school is you want to give the chance of the elite to some poor kid that outperforms other poor kids.
  Ooops got wrangled up about private schools again.
  Sorry.
  
  Reply
Andrea May 3, 2012, 6:45 am

Car repair costs of $475/mo adds up to $5700 per year! For two cars averaging 8 years old? This amount is excessive and is in addition to the ‘Car running costs’ of $300/mo, which I guess is fuel and oil. Driving older cars is smart and frugal, but not if the repair costs are so steep. Time to get ‘newer’ late model vehicles. http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/

Reply
- Kathy P. May 3, 2012, 7:17 am
  
  My suspicion is that these two cars are high-end makes, despite their age. When I was going through Consumer Reports car ratings, just for fun I checked out some of the luxury models (Jags, Range Rovers, Hummers, etc.) and was surprised to find that many of them had terrible reliability ratings and therefore, high maintenance costs. The price you pay for driving a status symbol, I guess…
  
  Reply
  - butterandjelly213 May 3, 2012, 10:50 am
    
    I have been stunned by the difference in repair cost between my Honda and BF’s BMW. I knew his would be more expensive but it’s often 4-5x my cost. Just an oil change for that beast is $100!
    
    Reply
  - Paul O. May 3, 2012, 11:02 am
    
    I can verify this. My dad used to sell Mercedes, Peugot, BMW, Jag, and Volvo. He said the last reliable “luxury” cars he ever sold were the late 80’s Volvo diesel station wagons that all the cool kids are buying up now for $3k even with 200,000+ miles on them.
    
    Reply
Mr. Money Mustache May 3, 2012, 6:51 am

Yeah, it’s always good to think of high earnings as a way to invest more, rather than spend more.

And there are other categories in the spending that look suspicious too, like “car repair” at $475/month. Is this guy a demolition derby driver? ‘Cause I spend maybe $100 per year maintaining my two cars..at least during the current “nearly new” stage of their lives (I have a 1999 and a 2005).

Reply
- Praxis May 3, 2012, 11:14 am
  
  I’m a little confused by some things in his costs lists…is he saying his monthly expenditure is $17,000 a month while his income is $7,000 a month?
  
  Some of his “monthly” fees don’t seem reasonable monthly fees…$2500 a month in travel? $3667 a month in school fees combined with $850 a month in summer camps? Wouldn’t these things not overlap- i.e. you send the kids to summer camp when you’re not in school? I’m not understanding the math here, and why there’s a bunch of monthly fees that add up to $17k a month but he says he’s putting away money every month.
  
  Also, car repairs are $475 a month, car running costs are $300 a month, and gas is $30 a month? $775 in car maintenance and $30 in gas (i.e. he’s not driving that much)? How is he spending 25x cash in maintaining the car as he is in gas?
  
  Doesn’t add up…
  
  Reply
  - Matt May 3, 2012, 11:35 am
    
    His income is $7k/month, plus a $300k annual bonus. So his actual monthly income is something like $32k/month.
    
    Also, I’m guessing he took some annual costs and divided by 12 to get the monthly cost. E.g. school and summer camp.
    
    Reply
    - Praxis May 3, 2012, 11:45 am
      
      That makes a bit more sense.
      
      Still boggled at the car costs being 25x the gas though. Someone needs to buy more reliable cars.
      
      Reply
      - Oh Yonghao September 2, 2014, 6:06 pm
        
        Having grown up without natural gas I probably would have said the same thing, but now that I have a house with natural gas I’m going to take a guess that there is a reason why it is down there next to power, it’s $30 for natural gas, not for gasoline for their cars.
        
        Reply
  - Kellen May 3, 2012, 11:57 am
    
    I bet the travel costs are spread out too. I have been to clients where they talk about how you “just can’t” have a flight over 6 hours in coach class, and you MUST have first class. I can tell you that if you are flying first class, tickets are MANY times more expensive.
    
    Reply
- Shiznik May 3, 2012, 12:15 pm
  
  Depends what he’s driving, some new car manufacturers demand certain maintenance schedules at registered stealerships. This can be pretty pricey if he’s driving an expensive foreign car.
  
  Reply
Ross May 3, 2012, 6:54 am

Wow, they spend more on their dog and phone a month than my family spends on food.

I agree with MMM that you should try to replace some of your existing expensive activities with some low cost alternatives. Quite frankly I have no idea how your able to spend $7,950 a month (Misc./Travel/Children Activities/Social) on “wants” but it obviously it must involve choosing some of the more luxurious items instead of the more reasonable priced ones. I would put these choices in with the mindsight of I ‘earned it’, I have ‘extra money’, I ‘deserve it’ so Im just going to go for ‘it’ (‘it’ be the more luxurious choice). However, if you challenge yourself to choose the more reasonable/frugal choice you will see that it is not that difficult and just as much fun. (Hiking and bike riding with a nice picnic packed is incredibly underated and an amazing bang for your buck). This may not be easy for you as you clearly have the money to spend on these luxuries but the fact is that you will likely have just as much fun without spending half as much.

I also think that savings should be increased by quite a bit before you become getting comfortable spending the way you are now. It is alot easier said than done to cut your expenses down to $3200/month when you are used to spending $17,000/month. I think a drastic spending change of this degree would be extremely difficult. After all, as MMM preaches, frugality and self-control is like a muscle that needs to be exercised and developed. If you’re not willing to exercise and train that muscle a bit right now, it will be shocked and likely cramp up when you try to all of sudden tell it (ie. you and your family) that it has to complete a full triathlon.

Reply
- Yabusame May 5, 2012, 1:51 pm
  
  I would suggest that they try an experiment for one month. To try and live on that $3,200 budget to see what lessons they learn from the experience. Tell the kids its an experiment too, and get them involved. Hey, it’s only one month, what have they got to lose?
  
  Reply
- Cletus August 30, 2016, 1:02 pm
  
  >Wow, they spend more on their dog and phone a month than my family spends on food.
  
  My guess is that the dog costs are for boarding it while they travel (since they travel a lot). I have had trouble finding a good solution to that problem, at least a consistently good solution.
  
  Reply
Kathy P. May 3, 2012, 6:54 am

As I was reading this, I tried to pay some attention to my gut feelings about the lifestyle of this family. We hear so much about “class warfare” and all…but honestly the word that best sums up their lives to me is “bland”. I mean, if everything gets done/solved with money, how dull. I kept picturing a scene out of “The Good Wife”.

Where’s the creativity, the challenge, the ingenuity? Where are the practical hands-on DIY problem-solving skills? Where (as MMM said) is the “hardship”?

For example, I know I get a whole lot more satisfaction from something like building my own compost bins out of a few screws, nails, chicken wire and free pallets than ordering a giant piece of plastic made-in-China composting technology and having the hired gardener install it. But maybe if I’d been “to the manor born”, I’d have never experienced DIY challenges and ingenuity growing up and wouldn’t think twice about buying a solution.

I applaud their success, but I don’t envy their lifestyle. A walk through a third-world slum or a stint working on a Habitat house in New Orleans wouldn’t be a bad thing, especially for those kids. There but for the grace of God go I, you know?

Reply
- upnorth May 3, 2012, 7:15 am
  
  I just can’t fathom spending that much a month without having more in the bank for retirement. Even if he loves his job/career, there are no guarantees that the job will be available in the future. I guess I am just more cautious. I’d cut back on the travel/misc/food and bank the money.
  
  Reply
- JM May 3, 2012, 11:02 am
  
  Where’s the challenge? Earning $400K+ per year is pretty challenging. I’m guessing he gets to use some of his creativity and ingenuity in earning a $300K bonus.
  
  Reply
  - biscuitweb May 3, 2012, 2:18 pm
    
    I doubt it. But even if so, what about his family? I suppose he is being creative enough for all of them?
    
    Reply
- Shanna May 3, 2012, 11:15 am
  
  Any American is well off compared to a walk through a third world country. My best friend from high school who lived on welfare with her mom was better off than somoeone in a third world country. I was born on welfare, lived in a small trailer in the country when my dad was seasonally employed and would have been considered wealthy by a third world person.
  
  Almost any American of any income level would benefit from such a walk if they weren’t too busy texting to see anything.
  
  Reply
- IAmNotABartender March 27, 2015, 8:33 pm
  
  I feel like there are many assumptions in this comment that aren’t grounded in the information provided.
  
  Reply
Baughman May 3, 2012, 7:00 am

I’ve pondered this same question myself, as I hope to be there in a decade. First off, MMM nailed it when he said that we ought not to spoil our children. That has got to be the most prevalent, pervasive, and far-reaching parenting mistake we make as parents.

When I’m FI, what will motivate me is not buying more expensive trinkets or more expensive trips (nature is free as MMM mentions, which is the coolest thing that any of us can possibly consume), but it will be maximizing the amount of good that I can do in the world.

It doesn’t take too far of a plane & bus ride to subject yourself to the most deplorable living conditions imaginable. What will keep me working after FI is philanthropy. It certainly won’t be to bequeath a massive inheritance to my children (see above paragraph). As Warren Buffett puts it, all of us MMM have won the ovarian lottery. We can do so much good in the world if we but focus on others. Of course, we can do a lot of good in the world by non-financial means, but when you are pulling in 400k/year, I would hypothesis that your time is best spent earning, then donating money rather than helping tutor a troubled teen in math. Both are certainly worthwhile tasks, but given your high opportunity cost and the worldwide need of philanthropic cash, I would venture to guess that you would do the most good with your time by continuing to work.

I’ve often wondered if it is a selfish thing for a person such as you and me in 10 years to “retire” and take up golf. I think my answer is “yes”.

Reply
- Liz May 9, 2012, 1:57 pm
  
  This is an excellent point. I didn’t see much in the way of charity on their spending list. This family has the opportunity to lower their consumption and do great things with their earnings to help others.
  
  Reply
  - Ann April 18, 2013, 7:25 am
    
    Even giving 1% would be a substantial gift to an organization. I’d highly recommend they put their money where their mouth is and give to some charity they believe in.
    
    Reply
JJ May 3, 2012, 7:01 am

I suggest paying particular attention to number 3. Public school doesn’t cost $3,600 a month. There’s a decent chance your kids are surrounded ONLY by other kids whose parents care. Some of the most important lessons I learned in life came from association with kids whose parents didn’t care. Most of these kids ultimately chose the wrong path and ended up really struggling in life. One or two that I knew worked like mofo’s, got involved in sports or activities such that the coach became their surrogate parent, and put in huge effort to do well. And they made it.

This was the single most important lesson I learned in Junior High / High School.

That kids with parents who don’t care can make it if…

1) They work their asses off.
2) They find other role models via activities / teachers.
3) They have a larger community that supports them via school levies, ymca sports, school lunch programs, and other charities.

Around half of my neighbors send their kids to private schools and they have no clue. They don’t work. They are 16 and driving new (and sometimes expensive) cars. They claim their schools are diverse because they offer scholarships. Which is a joke since no 12 year old kid is going to fill out his own scholarship form without someone prodding him to do it (they might try to make the public junior high basketball team but they aren’t staying late after school to fill out scholarship forms to private junior high without the prodding of a parent). This means that even the kids in private that are on scholarship have parents that care.

Again, the most important lesson I learned in Junior High and High School was taught to me by the parents who DIDN’T care.

Reply
- jared May 3, 2012, 11:21 am
  
  Excellent comment, It is nice to see things like this put into words. Caring vs uncaring parents is an issue my wife and I discuss frequently because she has to deal with the parents as a 1st grade teacher. It seems to often be the case that the uncaring parents are harder to deal with because any issue with their children that requires contact with them seems to be against their will and resented. This resentment seems to come out as a backlash against the teacher in ways that basically mean ” You cannot tell me how to parent my kids, or tell me I am not doing a good job, and don’t you dare do any parenting to them yourself, because that makes me look bad.”
  
  Reply
- BDub May 3, 2012, 11:53 am
  
  “There’s a decent chance your kids are surrounded ONLY by other kids whose parents care. Some of the most important lessons I learned in life came from association with kids whose parents didn’t care.”
  
  What makes you think rich people care about there kids because they send them to a private school? There are likely plenty of neglected kids in this school, just not the neglect you are talking about.
  
  Reply
  - JJ May 3, 2012, 6:41 pm
    
    Common sense.
    
    Reply
  - JJ May 3, 2012, 6:54 pm
    
    Also, I didn’t say “care about their kids”. I said “care”. And there is a big difference. Some parents of kids I went to school with just didn’t care. Didn’t care about anything. Not status, and certainly not their kids.
    
    It’s true that there are unlucky kids in some private school that have parents that care about status and not really their kids (at least I presume this to be true). Still, those kids go home to stocked fridges. They have a stable house that they sleep in every night. They don’t go to bed hungry. They don’t walk to school. Their parents are happy to pay sports fees and activity fees if it keeps them busy.
    
    I’m talking about parents who don’t care period. Don’t care about anything at all.
    
    Reply
- emcscottey May 3, 2012, 12:21 pm
  
  I can tell you first hand that there are plenty of wealthy, private school kids whose parents “don’t care”. Sure, they care enough to write the check. But other than that, they’re not home. Too busy working, spending time vacationing, out to dinner, or at the club.
  
  Reply
  - Jill May 3, 2012, 2:43 pm
    
    SO true, my best friend growing up lived in a mansion and had horses, took elaborate vacations, etc. Her father was a very successful property developer and her mom a doctor. They were never home and the kids were totally raised by a nanny. They never came to any of my friend’s events, and my friend often missed out on things because her parents were busy and their schedule was much more important. She even wanted to get a summer job in high school and they wouldn’t let her because she was forced to go on trips that they wanted/needed to take etc. Sounds nice to not have to work, but the fact is that her feelings were NEVER considered. Her parents were big powerful people and I just don’t think it ever occurred to them that she might have feelings because they were too damn busy.
    
    Reply
- JM May 3, 2012, 2:15 pm
  
  I think you could probably find both caring and uncaring parent in any school, private or public, regardless of socio-economic standing.
  
  Reply
JJ May 3, 2012, 7:11 am

Bottom Line:

If you want struggle: Pull your kids out of private, send them to public, and volunteer like a mofo at their new school. Your kids will benefit from your involvement. The kids whose parents don’t care will CERTAINLY benefit from your involvement. Your private school won’t miss you (since all those kids have parents that care). Become the surrogate parent to your kids new peers, some of which have parents that don’t give a shit.

If the number of kids in your district with parents that don’t care is overwhelming, then move to another district which hasn’t reached a critical mass of parents that don’t care. (this becomes two challenges… moving and becoming an involved parent at a public school).

Reply
- Mr. Money Mustache May 3, 2012, 7:23 am
  
  Ahh, the Mustachians, hardcore as always!
  
  I think we should take it easy on this guy. Remember, you need to see things through the other person’s lens. Life is great, and there is currently very little incentive to make changes.
  
  So you might not want to scare them off with talk of making the teenagers switch schools. Hell, even I would go to great measures to prevent moving my own boy to a new school now that he’s settled in.
  
  Also, just because the spending is high, doesn’t mean these folks are living a bland lifestyle. We don’t know enough from the details he provided to discern this.
  
  But even if our big suggestions are too scary, there is still opportunity to start some LITTLE hardship experiments. I’ve found these are rewarding and addictive. In the long term, you can become very happily frugal even as a multibillionaire. But starting from scratch, just hopping on a bike is a good start. (And who knows, they might already be avid traveling cyclists, it’s not mentioned in his summary either!)
  
  Reply
  - JJ May 3, 2012, 7:33 am
    
    As I understand it (and I could be wrong)… you are not seeing things through my lens. I have a 2nd grader. I believe yours is still pre-school age. Your response may be different in a couple years MMM.
    
    Reply
    - Mr. Money Mustache May 3, 2012, 7:56 am
      
      Good point! Little MMM is just finishing Kindergarten, actually. But I’m sure my perspective on child-raising will change throughout the years.
      
      Still, isn’t it reasonable to guess that people are more likely to be willing to experiment with first subjecting themselves to hardship, before they decide to dish some out to their children?
      
      Reply
      - JJ May 3, 2012, 6:43 pm
        
        Yes.
        
        Reply
    - Mrs. Money Mustache May 3, 2012, 9:04 am
      
      We’re super pro public school and little MMM attends the local public school, which many parents in our neighborhood overlook. The school is fantastic and we are very happy with it.
      
      The biggest influence for kids in a school are the teachers and I’ve heard of many public schools having incredible teachers even though the school itself might have lower test scores. I know of some teachers who prefer to work in public schools because of the challenges offered. Teachers and volunteers (like parents) can also round out the community and make for a great learning environment.
      
      For parents looking at schools for their youngster, I’d say please don’t overlook your local public school! However, in this case, with the kids being so much older, I do think that taking kids out of a school where they have all their friends and are doing well would not be beneficial to them.
      
      Reply
      - Paul O. May 3, 2012, 11:24 am
        
        Right there with you on the teachers bit.
        
        I went to a private Catholic school from K-8. After the nuns died or moved to retirement homes ~4th grade, underpaid teachers with families to support were brought in. Huge difference in quality in many cases. If one sends their kids to a private school, make sure they (1) pay their teaches a competitive wage and (2) teachers are competing to teach there!
        
        After middle school, Mom and Dad realized the Catholic high school cost as much as a college education. And since the religious bit existed in name only there, it didn’t provide any better opportunities than public high schools except mingling with the elite and parties with all the good drugs.
        
        Although the prospect of avoiding that half baking-soda crack easily found down the street was tempting, my parents opted to send me to public school. Outstanding teachers, and a promise my dad made me held true: at a public school with 2500 kids, you get to pick your own problems. The problems I picked were awesome teachers in advanced placement classes, leading to a lowered college tuition bill and opportunities for some sweet scholarships.
        
        I’ll add the caution that in many lower-income school districts (including my former home), some regular-level classes are out of control, and the teachers are driven half-crazy. Be sure you research the policies, and actual practices outside those policies, of your public school district.
        
        Reply
      - The Keichi One May 3, 2012, 6:51 pm
        
        “The biggest influence for kids in a school are the teachers and I’ve heard of many public schools having incredible teachers even though the school itself might have lower test scores.”
        
        As a teacher at a private school (and previously a public school) I whole heartedly agree with this. Students will be forever changed by many of the teachers they interact with far more than any test score ever they ever receive. At my old public school I knew teachers that tried so much harder to develop students emotionally and not just academically. There are still many good teachers at my current private school, but there is much more emphasis on test scores and cramming.
        
        Some of my students just don’t get the subjects they are being taught but they have the attitudes to keep on trying and to keep on learning. I know these kids will do great in life when push comes to shove. Many of these students attitudes were shaped by teachers and coaches, and not by text books and cram sessions.
        
        Get to know your kids teachers no matter what kind of school they are at. In the long run they probably will end up spending more time with them than you do if your working 40+ hours a week.
        
        (For full disclosure I have worked at schools in Japan and not the USA. Students tend to spend more time at school here than I remember back in the US. However, I still draw many parallels between the two systems and the impact teachers will have on a student, both good and bad.)
        
        Reply
        
        Mr RiskyStartup.com May 4, 2012, 11:40 am
        
        Teachers have the most important job of all jobs, but it is parental involvement that allows teachers to successfully educate kids. Both must be present for success.
        
        My wife and I can afford private schools, but we will be enrolling the kids in the public school – and use money we save to allow my wife to quit her job (already done) and as kids grow, use the rest to create teachable experiences (learning about Grand Canyon by visiting it is more fun than learning from the picture in the book).
        
        Our first kid is just over two years old, but he has been to the zoo’s, kids science museums, national parks and other educational spots at least twice per month for the past 12 months.
        
        Even if you don’t have enough time to do this, spending 4k per month on private school is stupid – put money away and give it to your kids when they turn 30 when they can use it to start a business or buy a home so that they never have to go into debt.
      - Tamar May 4, 2012, 9:12 am
        
        I’ll second that. My husband went to Catholic schools his entire life, and did great, however, my daughters went to public schools their entire life and also did great. The reason for their success, I firmly believe, is we were engaged with both our daughters, and their teachers & schools their entire academic career. Schoolwork always came first, and electronic distractions at home were very carefully managed and limited. Plus, we ate dinner together as a family most nights . . . go figure!
        
        Through keeping academics our #1 priority at home, both girls moved into the AP track in high school, where they were surrounded by very focused kids. (Makes sense, right? No one takes an AP course without understanding just how much more work is involved than in a “regular” course)
        
        Both girls graduated in the top 10% of their class, and had many college acceptances to choose from, plus a few modest scholarships.
        
        Parental involvement, meaning academics are a priority at home, not involvement in the sense of literally doing their homework!
        
        Reply
  - Kathy P. May 3, 2012, 7:50 am
    
    These folks spend an average of $567 a day for this life, and Dad only gets to spend 1 to 3 hours a day with his kids. He’s no doubt working hard for his money. They may indeed have what they consider to be an exciting life – all the excitement and adventure that money can buy.
    
    But looking at it through my lens and stepping back, all of it seems to be about spending to have a life. That, to me, seems – ultimately – bland. Cue the old Peggy Lee song: Is that all there is?
    
    Might be more fun and exciting to max the retirement accounts and then creatively figure out how to give the kids as much or more adventure on the money that’s left.
    
    Just sayin’ ;-)
    
    Reply
  - Ross May 3, 2012, 9:19 am
    
    At $30,000/year spent on travel I think it is unlikely that they are “aviod traveling cyclists” either that or they must be biking at some pretty exotic locations.
    
    Reply
- Praxis May 3, 2012, 11:21 am
  
  On a separate note, IMHO, anyone who lets their kid graduate from high school normally in Washington State and doesn’t have a special needs kid fails at frugality. Washington State has the most ridiculously amazing college program; anyone getting decent-to-good grades can just start going straight to the college of their choice at the start of their Junior year in high school and the state pays for all of it for the last two years.
  
  Seriously!
  
  You get high school credit & college credit for every class you take at any college (community or university), and the state pays for the classes. They’ll pay for any classes, and you can just knock out all your high school requirements early (1 quarter college class = 1 year high school credit) and graduate rapidly, or you can purposefully take classes that don’t fulfill high school requirements to take extra classes for free. You don’t have to set foot in the high school for your last two years of it.
  
  Tons of kids end up graduating either a year early from high school or graduating with their high school diploma and Associate’s degree at the same time, without paying a dime.
  
  Well, they have to buy books…that’s surprisingly spendy. But that’s it.
  
  I find kids all the time who forgoe the program because their parents don’t want them to miss out on the high school social scene.
  
  The program is called Running Start; any Mustachians in Washington State should be aware of it.
  
  Reply
  - Heidi May 3, 2012, 11:42 am
    
    A similar program exists in Minnesota
    
    Reply
    - Erik Y May 3, 2012, 3:03 pm
      
      Our oldest did the same thing here in CA. He graduated high school last year with so many credits from the local community college that he’s graduating with his AA in two weeks and I only ended up having to pay for two semesters worth of classes, not four.
      
      Reply
  - geek May 4, 2012, 8:31 am
    
    This is an impressive sounding program. I’m In WA but no kids. In my native NYS it was possible to take some classes signed off on by SUNY.
    
    This allows kids to concentrate on an area and it’s great, but what about the kids who aren’t inclined towards more academia? Don’t forget we still have plenty who would like to study trades. College is not a life improving and awesome experience for all.
    
    Reply
    - Heidi May 4, 2012, 9:52 am
      
      It appears that Iowa’s program was set up with trades first and the academic options followed. I agree with your statement as well. Many trades offer opportunities at developing craftsmanship and may only require stronger and earlier frugality skills to reach FI early.
      
      Reply
  - Lucas Smith May 7, 2012, 5:40 pm
    
    That is what I did in PA :-) but it was more of a special program with Penn State University and my Highschool (State College High). In retrospect the teachers at my highschool were very good, but it was actually my bad expirience with kids who didn’t care that drove me to move on to College. I started college full time at 16 (with 18 AP credits already under my belt ). I would have graduated at 19, but 4 ACL surguries (to fix the same problem) slowed me down a bit. I graduated at 20 (masters at 23 while working) and had a great job lined up as a Software Engineer in DC. It definitly has given me a head start on savings and life that I can’t imagine not having at this point.
    
    Reply
  - Erica / Northwest Edible Life September 28, 2012, 6:16 pm
    
    Hey, cool, Running Start plug! I did that program full time and LOVED it. I actually took summer classes after freshman HS year to skip sophomore year and count as a junior. This allowed me to go right into CC full time.
    
    Talk about efficiency! I could get all my credits wrapped between 9 and 12, be home to have lunch with my mom and have plenty of time for hanging around and reading and thinking plus a few part-time jobs even after my studies were done.
    
    Transfered into UW as a junior debt free at 16, lived at home my junior year and in a cheap studio near campus senior year so the money my parents had saved for my college was way more than I needed. Graduated a month after my 19th birthday with no college debt, a solid GPA and a (mostly) great university experience, including stints as a peer tutor and president of my major’s student association.
    
    Throughout my 20s I was asked one question more than any other about that experience: “But what about THE PROM?!?!? Aren’t you sad you missed the PROM?” ***Facepalm***
    
    Reply
Neal May 3, 2012, 7:17 am

Very impressive income! Does anyone know what he does? I’m assuming I-banking or something like that!

I’ve always battled between contentment and ambition. There’s a fine line between being happy where you are yet wanting to get a little further ahead. The former makes some people do nothing in life while the latter prevents others from ever actually enjoying their success.

I would love to hear Mr. MMM thoughts on this..perhaps post worthy.

Neal

Reply
- Arnold January 21, 2018, 10:52 am
  
  I did the ambition over contentment, what a mistake, stress, counselling, anti-depressants, missing the kids grow up. Just turned down another promotion, working on the stashe, got the exit plan in place. Thank you for your post.
  
  Reply
Baughman May 3, 2012, 7:18 am

As MMM mentioned, the #1 comment parents make is to coddle and pamper their kids.

I’ve thought a lot about the responsibility that comes with being FI. Given that most of us have won the ovarian lottery as Warren Buffett mentions, I think we have a responsibility to do the most amount of good in the world. Warren Buffet didn’t become the richest man in the world (temporarily) by just being smart. It was his intelligence coupled with a fortunate upbringing. The same can be said of all those who attain FI….which is surely a unique achievement in terms of the history of the world, where people age and die without becoming reliant on their children for support.

For me, what will keep me going when I am FI is doing the most good in the world. Whether that is accomplished on a small scale by being a good influence as a soccer coach or whether it is accomplished on a larger (and more impersonal scale) by donating hundreds of thousands of dollars per year to philanthropic organizations is a choice each of us FI will have to make, and one that will depend a lot on individual circumstances. For as valuable a contribution a soccer coach or a math tutor can have on a select few individuals, I would argue that hundreds of thousands of dollars per year to charity has to trump for those with high wage earning potential.

For me, FI doesn’t mean fancier things or fancier vacations. As MMM mentions, the best product any of us can consume is nature…and that is free. It’s the ability to do more and more good that will keep me going.

Reply
Stephen May 3, 2012, 7:23 am

I would like to know what job pays $100K plus a $300K bonus, so that I can retire after two years.

Reply
- Marianna May 3, 2012, 8:22 am
  
  seriously! who cares how much his dog costs per month!
  
  Reply
  - jared May 3, 2012, 11:23 am
    
    I was thinking one year at his income and I could retire…
    
    Reply
- Matt May 3, 2012, 11:43 am
  
  I suspect finance. I’m curious how many hours/day he works though. I know of people making this kind of money, but 12 hour days are the minimum requirement.
  
  Reply
  - Johonn May 5, 2012, 11:53 pm
    
    Well, he did say that he spends 1-3 hours per day with his kids, so I’m guessing it’s likely not quite 12 hours.
    
    Reply
    - IAmNotABartender March 27, 2015, 10:30 pm
      
      My boss comes in early, leaves late, and works after his kids go to sleep. (He sleeps probably 5 hours most nights.) So, it’s possible to do 12 hour days and still see your kids – especially if there is a stay-at-home spouse involved.
      
      Reply
rjack May 3, 2012, 7:24 am

MMM – Typo alert – Change

The situation is of course having a great WITH life no monetary problems whatsoever!

to

The situation is of course having a great life WITH no monetary problems whatsoever!

I think this guy should live his life however he wants to live his life. However, I think he should be very sensitive and concerned about what values, attitudes and lifestyles that he teaches his children. Whatever he wants to teach, he has to lead by example not by words.

Reply
- Mr. Money Mustache May 3, 2012, 8:00 am
  
  Thanks for the typo alert, I fixed it.
  
  Reply
James May 3, 2012, 7:30 am

I don’t see a lot of people in their financial condition driving 8 year old cars or living in 1500 sq ft houses. I agree with MMM that there are things to make sure are covered, but nothing in the summary says they aren’t covered. Maybe the kids are allowed hardships, maybe they do true camping and actually rough it some times. Maybe a big chunk of misc is a giving fund to help others in need. I think we all have lots of questions, but mostly I wish I had been as smart with my finances as they have been with theirs.

Certainly there are things to think about regarding waste and consumption that go beyond money, and it’s probably time to start giving back to society. Maybe cut out half the social and misc and send that to help provide clean water or provide vaccines somewhere. Everyone (but especially the kids) might really benefit from feeling a real cut back in order to fund a cause that will make a big difference in other’s lives.

Reply
Debbie M May 3, 2012, 7:31 am

I don’t get the “dilemma.” I don’t understand the question. I don’t even see the “unusual twist.”

They seem happy, and they seem able to handle some major emergencies. Sounds perfect.

The kids have camp, other activities, travel, and a dog–that doesn’t sound too sheltered. You can’t tell from this whether the kids get challenged or whether they get to do some of what they really want to do even if it doesn’t match their parents’ wishes (like maybe farming or auto repair).

**

I can’t help thinking that plenty of kids in private schools have parents who don’t care or at least have parents who take no time at all for their kids and show their caring with money only.

Reply
- JJ May 3, 2012, 7:37 am
  
  The kids in private whose parents aren’t involved still get to eat and sleep. The kids in public whose parents don’t care don’t always eat and sleep.
  
  The lesson I’m talking about is ONLY learned in public. It is NEVER learned in private.
  
  That’s just a fact. Sorry.
  
  Reply
  - Grant May 3, 2012, 7:47 am
    
    I think you may have made this public vs. private school thing out to be much, much more than it really is.
    
    Reply
- tbird3077 April 4, 2014, 4:44 pm
  
  I agree. Congratulations to the guy making the $$$, but I’m surprised he bothered seeking out a blog about FI. Anyone else seemed perplexed by this?
  
  Reply
Chase May 3, 2012, 7:37 am

The thing I’m concerned about is that you are highly dependent on your bonus. To sustain this lifestyle, you need at least a $120,000 bonus/year. You didn’t mention what industry you’re in, but if you happen to have a bad year, will you feel comfortable cutting down on your expenses? I’m guessing that isn’t something you’ve had to deal with with your current budget.

Also, good job on putting some money aside for charity, but it looks like you’re contributing about 1-2% of your gross income to charity after your bonuses. You may want to allocate some of that “miscellaneous” money towards charity, if you would get more satisfaction from knowing that money is going to help some people in need.

I don’t agree with Dave Ramsey on a lot of things, but I do like his advice for high income individuals and families. Once you have met your needs in your monthly budget, have a formula for that extra income so that your consciously spending or saving that extra money.

This way, if your “needs” budget is, say, $10,000/month, every dollar you get over $10,000/month will be allocated towards a certain goal. You could do something like this for that extra money:

10% Charity
10% Cash savings
30% Investments
15% Travel
15% Restaurants/socializing
15% Non-education kids expenses
5% Miscellaneous

Your percentages would be based on your own value system and wants/desires (needs are already taken care of in your basic budget).

I like this approach because it allows you to be very conscious about where your money is going and gives you more control. I find that the “envelope system” works well for this sort of thing. I used ING Direct to create separate savings accounts, but I’m pretty sure you can do the same things with almost any bank or credit union.

Congratulations on your success. I hope your family continues to prosper and you find financial independence.

Reply
- Rich Schmidt May 3, 2012, 10:57 am
  
  Chase said the two things I was thinking:
  
  1. You could invest more in the betterment of others by supporting all kinds of good causes, charities, etc. My wife and I make maybe a third of what you do, but we give away more than five times your monthly charity budget. (Not saying everyone needs to make the same choices we have, just saying it’s an area you could look at.)
  
  2. You may want to sock more away, invest, whatever in case you or your industry have a setback that dramatically cuts your income. There are all kinds of things that could severely limit your income unexpectedly (job issues, health issues for you or a family member, etc). I know you have your emergency fallback budget… but why limit yourself? Save/invest a bit more, and you could still include some of those things you love, even without your income.
  
  Reply
fiveoh May 3, 2012, 7:43 am

Personally I think you are a little light on the charity category. You guys are obviously blessed and should consider giving back a little more. That being said, Congratulations on loving where you are in your life, job, family and finances!

Reply
- Alice May 3, 2012, 11:38 am
  
  I noticed the charity amount is 5% of his gross monthly income too but my own contributions are nothing to brag about!
  
  From my experience, its so easy to “solve” everything with money and afterwards have nothing really valuable to show for it. I found I got to a point where I was “throwing” money away and that there were those around me willing to catch some!
  
  I am constantly amazed at today’s salaries and bonuses. What education/training does he have I wonder?
  
  Another topic I’d like to see is how much family (parents, grandparents, trust funds) have contributed to mustachians success.
  
  Reply
da55id May 3, 2012, 7:44 am

I would recommend that the family visit an old age home and interview the residents to understand what insights such persons can offer. For instance, life is short and the last several years are often brutishly difficult, financially confiscatory, disappointing and literally painful. This family needs to understand that at this present golden moment in time, they are on an island of tranquil plenty, but that in the fullness of time they will be forcibly moved to this unimaginably unfair oldering island. So now, while they have surplus they can decide to organize some of this surplus to commit to helping change this future in creative ways, including volunteering, investing and working along with others to fix this blight on the human condition. Interestingly, one of the major reasons to retire early is the understanding that conventional retirement leaves one dumped on the olders island…

Reply
- Jess May 3, 2012, 9:40 am
  
  dingdingding! This comment is spot on.
  
  Reply
MoneyOCD May 3, 2012, 7:51 am

I may relate to some extent to that guy, except I want my freedom like yesterday!!!! We do not earn as much but still kind of a lot. One day I may ask you MMM to review our budget in full!
Just want to chime in on one part of it right now.
Car repair budget – we have one too, but labeled just CARS.
$400/month goes there- designated saving account (almost as much as in this case study)
We have 3 cars all paid for, average age is about 10 years. Third car is for student daughter that lives on campus but has to drive to work (yes, we are making her to work for her spendings and bills, even if we can fully support her while in college).
So this $4800/year pays
–Car insurances ($1500/year on all cars)
–License and registrations ($300/year on all cars)
–$3000 leftover pays for maintenance and repairs (we are trying to do those as cheap as possible, many things done by ourselves I would say it averages about $500/year the most)
REST gets accumulated there as Car replacement fund.

And no, we do not have any plans to replace daughter’s car. She is expected to buy next one on her own.
I can not say that it is exactly what that family is doing but their number is not that far away from ours.

One other point that I want to make for this case study – speaking from experience here. :-(
I can understand that it is very hard to see your children growing up with straggle due to limited family finances available, but it is 1000 times HARDER (trust me on that one) to see them at age 20+ having no skills for saving money and just waste every penny that they got trying to continue to live life style that they get used to while living at home but not really be able to afford on their own.
MMM, you are spot on with #3 in your post.

Reply
Guitarist May 3, 2012, 8:03 am

I need what he spends in 3 years to reach FI. And I am including what I pay for rent every month in my current calculations.
What does it say when I believe that MMM’s spending habits are more real then this persons? I seriously believe that this must be a fabrication.

– School fees should be gone.
– MISC is a mystery that I don’t even want to touch yet. And I’m with MMM, that is 50% over my overall spending.
– Travel at $2500/month??? That’s how much you should spend for travel in a year… a GOOD/expensive year.
– Food is ridiculous. Are you going to El Bulli every night? Does this include the cost of a private family chef or something?
– Children Activities. I don’t remember soccer (or any city sport) or scouts costing that much.
– Summer Camps. How exactly is this a monthly expense. Honestly, the only thing you get out of the expensive camps is hanging out with other rich kids, all the activities are basically the same. Broaden their network.
– Social. You need cheaper friends.
– Car Repairs. Get bikes and more reliable cars.
– Legal Fees. Lawyer on retainer? I suppose if it has to do with your work it might be necessary, though, doesn’t the company have one you could use for anything job related?
– Charity. Can’t complain about that one. You have the means, this wouldn’t be the first thing I’d cut to bring down expenses.
– Car Running Costs. Gas?
– Insurance. Necessary
– Phone Costs. Too high. Look for cheaper plans. Especially for the kids.
– Dog. Why is it this high? I get higher end food for a 65 lbs. dog and he eats less then a bag a month. I spend less then half this for a dog and two cats.
– Cable. Cut it. Don’t need to, but you might get more out of life.
– Water. Is it this high because you are watering the lawn every night? It doesn’t need to be perfect you know.
– Dry cleaning. Job necessity.
– Power. It is what it is.
– Security. Necessary? You say you have a smaller house. Is it in an affluent area? Afraid of being targeted?
– Gas. Necessity.

Give me half of what I saved you every month and I would be set for 3.

Reply
- Mr. Money Mustache May 3, 2012, 9:18 am
  
  Hey Guitarist.. nice enthusiasm as usual, but I’m curious – what does this quote from you mean:
  
  “What does it say when I believe that MMM’s spending habits are more real then this persons? I seriously believe that this must be a fabrication.”
  
  Are you saying that you think that either my annual spending report or this reader’s are not truthfully reported? Because I know mine are straight off the bank and credit card statements, and I have no reason to believe this man has made anything up either.
  
  One of the most useful lessons I’ve learned from running this blog is that people really do operate with an incredible variety of spending levels in their lifestyles. That’s part of the magic of sharing the details with each other – by seeing the drastic differences, we can capitalize on them.
  
  Reply
  - guitarist86 May 4, 2012, 12:55 pm
    
    Sorry about the confusion, MMM!
    That comment was a half-joke relating to the comments you get outside of your site (like msnbc.com) that accuse you of fabricating your success, whether it be income, expenses, or the fact that you are actually retired.
    
    In response to those people, I find what you do easier to believe then people spending $17k/month EVERY month.
    
    I think it would be interesting to see what the average msnbc.com’er would believe more. Your budget or his.
    
    But I do believe both of you, I just can’t imagine spending that much every month.
    
    Reply
- Liz May 9, 2012, 2:12 pm
  
  Set for 3 months or set for 3 years?
  
  Reply
Chris May 3, 2012, 8:11 am

Wow! What an interesting situation. I’ve never understood the idea of sending your kids to a private school? If the price was right, sure, however, the price never seems to be right. You get out of school, what you put into it in terms of effort and dedication. Kudos to this gentleman though, he’s doing something right.

I would like to know what career field gets a 300K bonus?

Reply
- cdub May 3, 2012, 10:33 am
  
  Probably one that is “Too Big to Fail?”
  
  Reply
Liz T May 3, 2012, 8:26 am

If he thought his life was perfect the way it is, he probably wouldn’t have written. Just asking the question means there are some doubts, which he and his family should explore. Early 30s may feel all grown up, but it’s a temporary plateau on the path. If life proceeds like it does for most of us, there are plenty of twists and u-turns still to come. Just sayin’.

Reply
scantee May 3, 2012, 8:29 am

What are the letter-writer’s goals? He says he doesn’t want to quit his job or retire soon and he is able to live a lavish lifestyle and save so I’m not sure what advice he’s looking for. I mean, with a few tweaks in his budget he could easily be saving an extra $50k a year!

And yet something brought him to this site and spurred him to write to you which makes me wonder if there is more going on than he is willing to admit. He feels burdened by stuff? He doesn’t get to see his kids as much as he’d like? He wants a slower pace to his life? I don’t know the answer but getting at the root cause of what’s appealing about mustachianism might help him sort out what his goals are for his finances.

Reply
- CNM May 3, 2012, 10:12 am
  
  Yes, this was my question. It doesn’t sound like he wants to retire early and he seems pretty pleased in his situation. I was thinking maybe he wants to make sure that he’s saving/investing enough so he can eventually retire at 65?
  
  I agree with your comment, scantee, because it seems that goal setting is the key to any diet, including a money/consumerism diet.
  
  Reply
ANGULO May 3, 2012, 8:42 am

I hate to sound like a complainy pants or a participant in class envy…
But I always wonder why people who have obviously been blessed financially
and otherwise read this and other personal finance/frugality/retirement
websites and blogs….
It’s like the people who call in the Suze Orman Show on the “Can I Afford It?”
segment wanting to buy…a huge gazingus pin…and then show that they have a monthly income of $10,000 or more with 350K in retirement and can obviously afford to buy
whatever they are asking about(and they are under age 40 to boost).Are they just using the opportunities to brag about their position in life
without feeling too guilty?

Reply
- Diane May 3, 2012, 2:29 pm
  
  Do you think that people who have made good decisions are any less deserving of praise than people who dig themselves out of their own self-made morass? If you do, that would most definitely make you a candidate for the Complainypants Super Sweepstakes.
  
  Reply
TK May 3, 2012, 8:51 am

The family is choosing to spend as it wants and is not whining about how tough it is to save or where can my budget possibly be off track. In fact, I think the family is doing all of us a favor by pushing resources back into the economy – they are supporting numerous jobs and industries with their spending and is somewhat resulting in the transference of wealth over and above the high taxes they likely pay – my guess is that their gross income is around $800K.

For those that question how can someone make a $100k salary and get a $300K bonus many jobs in sales and finance have this kind of incentive structure but one slow year and it could go away – the individual and the company need to continue to be high performers.

That said I think they are delusional about their ability to drop their spending down to $3k per month if needed and it not feel painful – I have cut back and try to live frugally and spending is way below my peers/neighbors but I am nowhere near MMM level (partly because of high property taxes and kids activities – hockey is expensive). Also notwithstanding that he likes his job and it has been lucrative/successful it could always go away and they are missing a tremendous opportunity to put themselves in a position to not have to worry about finances at all in the future.

Reply
How to Buy Happiness May 3, 2012, 8:56 am

Ted talk on how to buy happiness: http://www.youtube.com/watch?v=PsihkFWDt3Y

Reply
- Mrs. Money Mustache May 3, 2012, 9:37 am
  
  Wow! Great Ted talk.
  
  I am definitely checking out DonorsChoose.org. That sounds like exactly the kind of place I would love to donate. What a fantastic cause. I can’t believe I never heard of it before.
  
  Thanks for posting that!
  
  Reply
- Joy May 3, 2012, 11:46 am
  
  I don’t know why but, I have known since childhood that
  giving away my money made me happy. I grew up in a poor
  home. We had very little. Yet, when I did have money I would
  spend it on others.
  
  I enjoyed it so much that I would give until it was all gone. It to me
  is an incredible high that I can’t get by buying wants. So, I don’t get
  to feel like I have done some fab sacrifice. No. I am merely satisfying
  a deep need/want within myself.
  
  Now, this can backfire too. I don’t enjoy giving to others that truly don’t
  have a need. They just spend their money and, then want to spend yours
  too. No. No reward there.
  
  It took marrying my husband to find balance. As, it was hard for me
  once my needs were met to keep money. Sometimes it still bothers
  me. I think, “I have this money and, “such-n-such has this or, that need.”
  But, then I remember I can’t say “I” have this money, it is “we” have this money.
  
  We are Christians. We do give beyond 10% of our income to our
  Church. We also give outside of Church.
  
  Giving is extremely rewarding. :)
  
  I wish everyone would catch on to this incredible gift we can give to
  ourselves.
  
  Reply
Leslie May 3, 2012, 9:08 am

These people got married and popped out two kids in their early twenties, AND managed to pay off all their debts and work their way up the career ladder to land in the 1%?

Damn. Among my college friends (we’re late 20’s), some of us have managed to get married, some of us have managed to advance far enough in our careers to be making good money, but hardly anyone has done both. This guy must work in the financial sector or something?

Reply
- Mrs. Money Mustache May 3, 2012, 9:20 am
  
  Yeah, I was thinking the same thing – that’s pretty awesome!! A lot of potentially Mustachian stuff going on here, assuming all this was done through hard work. And mom staying at home is great too!
  
  Reply
lolconsumerism May 3, 2012, 9:14 am

This just seems the equivalent of the age old ‘epeen flexing’. Only with benjamins, and franklins.

I mean I just don’t get it, and if I read correctly between the lines, neither does MMM. You could easily be given advice to make your life more efficient and less expensive. Reduce all your spending such that 95% of your income would be in savings.

But this isn’t what the poster wanted. The question is almost more, philosophical. Not even that, there’s hardly a question, and more a statement of: ‘Here is my life, it is awesome. Be jealous.’ Since they already state they are aware that they could spend less but don’t really want or need to.

So what’s the point, really?

I like the early retirement approach for the simple fact that it is efficient, so I won’t ask ‘Where is the challenge?’ or ‘Isn’t that boring?’ You already know your lifestyle is inefficient and don’t desire to change it. I’ll ask a more simple question instead.

Why are you here?

Retirement isn’t in your scope. You are comfortable with your spending habits. If I had to guess, you are here because you admire the efficiency, but see no reason to change your lifestyle, given your current situation and extremely low chance of potential misfortunes. Well, I completely agree.

At this point, all you could do with making your lifestyle more efficient is gain more money for investing, which you don’t need. You could change your perspective to be less individualistic. This could in turn lead you to wanting to benefit society rather than yourself. By making your spending efficient, you could spend the money saved on charities, or opening and running a nonprofit, or doing any number of things to benefit your community. Or thinking small, more money could benefit more of your children and children’s children.

But what’s the point, right?

Reply
- Mr. Money Mustache May 3, 2012, 10:52 am
  
  Interesting perspective, lol. But I see it in a more positive light than you. When you say this,
  
  ” Not even that, there’s hardly a question, and more a statement of: ‘Here is my life, it is awesome. Be jealous.’”
  
  it sounds like a negative assessment of this guy’s motives.
  
  Here’s a bit more of the inside scoop. The prelude to his situation in the email to me was this:
  
  “I have found reading your blog an enjoyable and enlightening experience. Some of your arguments are things I feel strongly myself (e.g. the urgency of reducing debt, and escaping the trap of working two jobs to fill a garage with stuff you do not use) and others have challenged me to reconsider our own lifestyle.
  
  My wife and I enjoy your Reader Case Studies and are curious to hear your opinion on our own situation. We are very fortunate in that our circumstances are quite different from your profiles, and I am certain you will have a strong opinion.”
  
  Here’s how I see it: we have someone who, despite a surplus of money, is curious about the ideals of Mustachianism. He already spends much less than many of his income peers, and is intrigued by all these people who actually enjoy spending even less.
  
  When you make a great deal of money in the US, you don’t run into many people who tell you to do anything other than spend it all. We MMM’ers are going to change all of that, but give us a break, we’ve only been around for a year or so!
  
  So I offer him congratulations again, for poking around at the corners of the Curtain of Consumerism, to see what’s really behind there pulling all of our levers,
  
  Reply
  - lolconsumerism May 3, 2012, 3:38 pm
    
    I could certainly see that, someone who toys with the prospect of it, but is still very much stuck in the, hm, affluent culture they are likely surrounded by. That is, their neighbors, their friends, the friends of their kids, and maybe even family, all expect a certain lifestyle.
    
    I still don’t understand the reason behind submitting all of that information, only to ask for ‘an opinion’, further stating that saving more seems unnecessary, and retirement (or FI) isn’t a concern. In that case, an analysis of their monthly spending becomes a waste of time, and it was an equal waste of their time to submit this information if they didn’t want it analyzed.
    
    You seemed to get a similar feeling, I think, and thus instead of giving thoughts on how to cut spending, your advice was more of the spiritual sort.
    
    It’s almost like they want to be convinced they should spend less money, like they want to be told the financial bogeyman is gonna come get their kids and their job if they don’t save 80% of their income.
    
    Reply
- Bella May 3, 2012, 11:50 am
  
  I think the point is that the poster is trying to figure out if Mustachianism can only be applied in a ‘hard core’ all or nothing way.
  While this families income is still much more significant than ours, I find myself in a similar situation – there are certain things I am just not willing to give up to live a more frugal life. I do like my job – I don’t have the overwhelming NEED to GET OUT. But the idea of financial independancee is very alluring, there are areas that I could be more frugal – that I would totally punt on my ‘high spending’ alternative once I know what I could save in the process.
  so I read, and make notes, and discuss with my spouse, and some things we change – and some things we don’t.
  I think the OP is trying to dial in on ‘what to try first’. And I think he needs to just go through their budget – really critically – and it will become obvious where to start. I think he doesn’t feel like he needs more money – so maybe just a challange for the sake of a challange – see what you can do in a month, or a week to cut in one area. And do you miss what’s gone?
  
  Reply
Mrs. Money Mustache May 3, 2012, 9:18 am

First of all, I think it’s awesome this family is reading MMM!! That means they are already thinking about stuff like this. We don’t know much about the family other than the numbers, so it’s easy to assume things.

Other than what MMM has already pointed out, I would say that this reader should probably look into spending more time with his kids (before they are full fledged teenagers!). It sounds like his wife has spent a lot of time with them, but maybe his time has been lacking? Does he know the names of his kids friends, has he ever volunteered at the school, does he really know his kids inside and out? It’s common for a mother to know more about her child than a father and sometimes this makes the mom and her kids much closer.

One thing that has really been evident to me these last few years with little MM is how well MMM knows his son. He knows the names of all the kids in the class, he volunteers regularly, he reads to him for hours at a time, he takes him to the creek and they build things together. This is incredible to me and something I never really had, even though I’m close to my parents.

Going on trips together and spending quick evenings and rushed weekends together (especially if the kids have a lot of activities) is not the same. It’s about slowing down and really getting to know your child.

Also, I feel like some family challenges might be fun for this family. Maybe read a book together about something or watch a movie like “no impact man” and as a family try to meet the challenge. See what it’s like to not generate any trash for a week. Don’t buy anything new for a month. This would be a great way to spend time as a family, have a common goal, and teach your kids (and yourselves!) something really valuable. Do you regularly visit the library, go to the park, family hikes/picnics, camping, or other free activities?

What about taking time off work/school (or in the summer) and have the whole family go on a family bike ride across your state. I recently read about a father and son going off together on a 3 month bike ride across the US for the summer – that sounds fantastic! They bonded a lot, it was a great summer vacation, and the mother/daughter had time to themselves and helped support the bikers from home.

Overall, this family is doing great of course! It’s nice to feel secure and happy. Having said that, I’m surprised the savings are only $1M and I think that going through a hypothetical early retirement exercise, or cutting back some work hours, would be a fun experiment.

Reply
- Tanner May 3, 2012, 9:31 pm
  
  I got really into researching bicycle touring last summer. Our girls are 1 and 3, but I think it would be awesome to do something like that. I even got my wife into the idea. Hopefully some small tours as they get older and once we achieve FI, it would be fun to take it across the US or even North to South America.This family was extremely inspirational:
  
  http://familyonbikes.org/blog/about-2/about/
  
  This was a guy riding back home to the states from being in South America in the Peace Corps:
  
  http://rideforthetrees.wordpress.com/
  
  Here is another one of a couple who did the US last summer for Autism:
  
  http://crosscountryforautism.tumblr.com/
  
  Those were some of my favorites. Would love to see the MMM family document a bicycle tour on the blog!
  
  Reply
GE Miller May 3, 2012, 9:35 am

This is an interesting one.

It sounds like you need a challenge more than anything else. Your investment banker (I presume) income is affording a complete lack of challenge by just throwing significant levels of money at everything.

Here is my challenge to you:
1. Start living your life as if you just lost your job. You say you could easily drop to $3200/mo. in expenses if you did, but that does not appear possible per your expenses breakdown. Your children’s school costs more than that alone – would you pull them out?

You love your job now, but in order to get that level of bonus income, you must be in a really high stress, high demand, high turnover job. You’re young, and that stress is bearable now, but will it be in 5, 10 years? If you start out on your own (either out of choice or necessity), it will take years to get yourself back to that level of income.

2. Only 1% of your income is going to charity. Perhaps it is time to start getting involved in charitable causes and giving to others. You are spending 10X what many mustachians are. Why not cut that down to 2, 3, or even 5X, add more to your stash, and give the rest towards a cause you are passionate about?

3. Start lobbying your local politicians to raise taxes on the 1%.

Reply
- TK May 3, 2012, 10:05 am
  
  I don’t get why everybody insist they are bland or need to add some challenges to their lives. I am sure his job is plenty challenging and maybe the private school is extremely rigourous and maybe some of the kids activities include learning instruments and playing sports and maybe their vacations are a combination of luxury/education/active/goodwill, doing stuff in your backyard is great but you know what it costs money to go see the coliseum, the alaskan glaciers or whatever. Although I still don’t think they are doing anything MMM the high income relative to their high spending masks it and makes it look like there are some MMM qualities in there.
  
  Reply
Brian May 3, 2012, 10:23 am

Kind of a weird comment section here. Seems like people are envious of a huge income.

Anyone saving 40%-60% of their income gets my kudos.

Reply
- Jimbo May 3, 2012, 10:30 am
  
  Well, probably because we think it’s weird that anybody spending 200k per year gets kudos on this blog?
  
  Reply
  - Geek May 3, 2012, 10:32 am
    
    Compared to the whinypants 1%ers, this is a nice contrast. Though still.. a bit jealous here.
    
    Reply
    - cdub May 3, 2012, 10:40 am
      
      I’m not entirely sure we aren’t being trolled here but I would certainly love to be in that financial situation. I still think without knowing the person’s goals there really is no advice to be given here. Does he want to be happier? Wealthier? More philanthropic? Mid life crisis? What is really going on?
      
      Reply
      - Leslie May 3, 2012, 12:17 pm
        
        I am also a little suspicious we’re being trolled… If so, it didn’t really work, since MMM’s advice is totally reasonable and not lulz-worthy. The comments, on the other hand… :)
        
        Reply
  - Brian May 3, 2012, 11:26 am
    
    Sure, that can be your perspective, Jimbo — it’s a fair one. I could flip it and ask why anyone saving $200k a year and 50% of their income, all with one parent staying at home, should get criticized too harshly.
    
    Depends on what you want to focus on.
    
    Reply
    - Jimbo May 3, 2012, 11:42 am
      
      This is not MSN money! This is MMM!
      
      On a normal financial planning blog, people get commended for not driving a gas guzzler. Big whoop! Here you get commended for not driving.
      
      Come on guys, have you been reading the blog? Have you seen these numbers?
      
      I can perfectly understand the writer to be happy with his financial situation. But I’m not gonna be impressed if I feel he could do better – and by looking at the numbers, he definitely could.
      
      Reply
      - Brian May 3, 2012, 1:00 pm
        
        MSN Money? Gas Guzzler? Those are strawman. (With exclamation points!!!)
        
        Yes, I’ve read every post of this blog and one of the pillars is using the “shockingly simple” math of savings rates. You don’t have to be impressed with anything, but any time someone’s saving 40-60% of their income, yeah, I’m impressed. I’m impressed when someone earning $25k can do it or $250k can do it, because the shockingly simple math gets them to FI at the same time.
        
        Yeah, he could be doing better. So could you and I.
        
        Reply
      - Jimbo May 3, 2012, 1:18 pm
        
        Ok, I dont want to pick a fight, but seriously? Making fun of adequate punctuation?
        
        Good for you for picking up on the shockingly simple math. Have you read the parts about Badassity, insourcing, maximizing savings rate, Adaptative Hedonism, not wasting resources and little employees… The list goes on and on.
        
        Good for you for being impressed and giving kudos liberally, but I can’t blame any commenters for not being impressed.
        
        Oh, and assuming criticism is jealousy – how’s that for a strawman?
        
        Reply
        
        Jimbo May 3, 2012, 1:22 pm
        
        This was directed at Brian, I must have messed up my reply button-puching…
        
        Brian May 3, 2012, 1:33 pm
        
        Yep, I’ve read every word MMM has written on the blog. I’m currently going back through from the beginning for the second time. Does that give me enough ‘street cred’ do disagree with you now, Jimbo, or must I not have read carefully enough?
        
        Yes, the principles are to put every little employee to work, but no one besides obnoxious jerks are going to take Mrs. MMM to task for spending money on a crossfit class. The bottom line is that we all define an acceptable amount to spend on the various categories of life’s luxuries.
        
        My posts were not to those who are “not impressed” but those who go out of their way to express outrage over a 50/50 spending/savings scenario, trying to take the guy to task because this his spending figures have a couple more zeroes afte the figures. Basically: people like you. Yeah, I’m picking a fight.
        
        *Punches the jeaolus Jimbo in the face.*
        
        Jimbo May 3, 2012, 2:03 pm
        
        Haha, nice, finally some face-punching!
        
        Listen, let’s agree to disagree then. Nobody can live on 0$ per year, but I feel like 200k per year is way over in the ridiculous level. Feel free to aspire to such a level.
        
        I don’t really like being called jealous everytime I criticize. Heck, I certainly can congratulate the letter writer for earning such an income. But I know I wouldn’t act this way if I made this sort of money. I’d rather be called self-righteous – now we’re getting somewhere.
        
        andrew May 3, 2012, 2:16 pm
        
        You’re actually wrong about that, Jimbo. Daniel Suelo lives on $0 a year and has been doing so for a dozen years. Fascinating story:
        http://radiowest.kuer.org/post/man-who-quit-money
        
        This guy is super-mustachian, a total bad ass, and quite wise. Read the book.
        
        Brian May 3, 2012, 2:21 pm
        
        Understood. I jumped in because I thought the MMM community was piling on a bit, and that rubs me the wrong way.
        
        Jimbo May 3, 2012, 2:28 pm
        
        Alright.
        
        But don’t laugh at punctuation anymore. It can save lives.
        
        Brian May 3, 2012, 2:32 pm
        
        Yes it can!
  - Troy September 25, 2013, 10:05 pm
    
    So where is the kudos line?
    
    MMM constantly states it’s the percentage of your income being saved that matters, and this guy is saving 50% of his income and already has a million in cash and no debt at early 30’s age.
    
    I’d say he has earned kudo’s from every one on here. He already has the cash. He already has the debt paid for. He already saves six figures each year. And he could tap the brakes at any time if needed.
    
    Is $20K per year in spending the line, or $30K, or $50K.
    
    Reply
- Lea May 3, 2012, 10:44 am
  
  Hey, I’ll admit I’m envious of that huge income. It’s easy for me and my sub-$100k income to say that if I were pulling in that much money I’d save 95% of it, but I’m sure I’d be guilty of the lifestyle creep too.
  
  I think most of the negative comments are fueled by the question of why this person wrote in in the first place. He’s saving a big chunk of his money, though not enough if he wants to retire in the next few years and maintain his lifestyle. But he says he’s not in any hurry to retire, and doesn’t ask any specific question. The general tone of the letter is “look at how much money I make! what do you think of my situation?”
  
  Reply
Heidi May 3, 2012, 10:38 am

For most readers, I’m guessing change is prompted by financial achievements (paying off mortgage, FI), financial need (debt or close expenses), or a desire for independence or challenge.
In this case, it seems changes would have to be value-driven. He doesn’t seem to know what he wants in addition to what he has so anything that offers exploration for him or his family seems the key to finding incentive for change. Otherwise, it just seems random.
The contentment in this case is rare which I find pleasant and fascinating.
Many families might resent even questioning such a good life so I commend him and his family for be willing to test these waters.

Reply
James May 3, 2012, 10:49 am

Please consider giving more–a lot more–to charity. You can literally save lives with your extra money (even more if you’re willing to give up some of your current spending). I know it’s difficult to connect with the concept emotionally, but I think you, and the rest of us with excess money, have an obligation to help people out who aren’t so lucky.

If you’re interested, you should Google “Famine, Affluence, and Morality.” It puts into perspective how much we should actually be giving.

Reply
- abitha May 4, 2012, 7:24 am
  
  Completely agree with the above. I earn less than a fifth of what this guy does, and still give more to charity than him. After reading the article recommended above, take a look at http://www.givingwhatwecan.org/ and use the interactive tool in the resources section to work out how many lives you could save per year if you gave away a decent percentage of that income. (And read the ‘myths about aid’ section of the site first if you’re skeptical about giving to charity.)
  
  Reply
mike crosby May 3, 2012, 10:56 am

My wife likes to watch the Home and Garden channel where people either buy, rent or sell properties around the world.

Something that is maddening is that no matter how much someone has to spend, it’s never enough. Just the other day, this couple is moving to Belize and they want to rent before they buy–their budget being set at $5500/month.

More than once the talking head said it will be difficult to find a place because the Mr of the couple is frugal and insists on sticking to the budget.

I asked my wife if she’s ever noticed while watching that program, has anyone ever said what the budget is to spend and the a realtor has said “No problem, there’s plenty of houses in that range”? Or, “Your budget is too high, we can find something much less, and you’ll be just as happy”? My wife agreed, that never happens.

MMM, you are seriously Bad Ass. Really, these folks are doing fine and sound like wonderful people, but I bet they’d be a lot happier if they took your advice.

PS. These folks do have it made, but stories I’d like to read would be those who have > $5 millions and keep a frugal mindset. Now that would be fun, but I’ve never found it on the internet.

Reply
- Kathy P. May 3, 2012, 11:03 am
  
  I used to watch the show (back when I got lots of cable channels) on HGTV where they’d do a whole house remodel that took many months, sometimes more than a year. Invariably, it was a family of 3 or 4, living in 2500 square feet and they claimed they just didn’t have room. So they’d blow out walls, add a second floor, stainless steel kitchen with granite countertops, a couple new bathrooms…the works. In the end they’d double the size of the house and when they did the big walk-through, all their stuff was still sitting in piles on the floor!
  
  Reply
- Mr. Money Mustache May 3, 2012, 2:21 pm
  
  Mike – I think I know several readers who DO have $5M or more and keep a frugal mindset.
  
  And I’m going to go out on a limb and guess that the MMM family will end up as one of these families sometime in the future as well. You heard it here first :-)
  
  Reply
  - Jared May 9, 2012, 11:34 am
    
    I grew up in a well to do family…. however it was not until I was around 17 that I really realized how much money my father really had (well over $20m in assets). I never had designer clothes because I was required to purchase my clothing on my own once I was old enough to mow lawns and earn income on my own( I remember mowing 2 or 3 lawns a week when I was 12). I have met many people who grew up like me where parents understood the value of the dollar taught us a lot about making money and how to live frugally and let us do it on our own. I can’t say I did not get some perks having parents who had money. But if you passed my parents on the street walking around, driving their car or heading into their home you would never know they had money. I am grateful that they taught me to be self reliant and build wealth on my own.
    
    We talk about money often and my dad always says even now he says the best thing he ever did was always live well under his income even when he made very little and paid off his house as fast as he could.
    I won’t go into frugal details but just take it from me I am happy I have had no handouts it builds pride and confidence in your kids.
    
    Reply
- Shanna May 3, 2012, 5:32 pm
  
  I think the biography of Sam Walton would show extreme frugality. Some of the people in Millionaire Next Door books have over 5 mil.
  
  Reply
- guitarist86 May 4, 2012, 1:26 pm
  
  I watch house hunters international from time-to-time and laugh at some of the people.
  A military couple wanted to buy a house in Italy while stationed there. Of course the agent knew they were military… think she might know their per diem and salary? You bet!
  And every time she went over their budget, the couple just told each other it’s how you have to live in a foreign country.
  For any of you who end up overseas, don’t buy that garbage.
  Real Estate Agents in other countries are no more noble or ethical because they are not American or because you are a foreigner. They want your money and they will take it if you let them.
  
  Reply
- Investlike1percent May 27, 2012, 12:13 pm
  
  mike,
  
  i am just now coming to terms that i can stop being soextremely frugal.i have a networth >5m, my family probably lives off 2-3k a month. money doesnt always change a person. just starting blogging thanks to inspiration from MMM.
  
  Reply
andrew May 3, 2012, 11:08 am

So this fellow is giving the same amount ($417) to charity as he is to lawyers (legal fees) every month? 2.5% of his monthly spending. For starters, I’d recommend he at least quadruple his charity expense. Charities need your money more than lawyers do.

What the heck is he doing to his vehicles that car repairs add up to $475 per month? Excluding routine maintenance, I’ve maybe spent $475 total on car repairs in the last 16 years.

Reply
vwDavid May 3, 2012, 11:11 am

He should save more, work less, and spend more time fathering the kids…

Or, save way more and become notably philanthropic… or, save way more and set up income generating investments on behalf of charitable organizations?

Reply
- Amonymous January 23, 2017, 9:08 pm
  
  Ah, the fish metaphor (give man fish and he will eat for a day / teach him to fish and he will eat for a lifetime) applied to charity sounds like a great idea!
  
  Reply
Jimbo May 3, 2012, 11:12 am

Alright MMM… Please admit you went super easy on the Face Punching because you somehow know these people and will see them at the grocery store from time to time.

I mean, no later than yesterday you were saying that being a big earner is not an excuse for being a big spender.

You’re usually all about maximum savings, minimizing waste, not having ridiculous lifestyles… What gives? Suuuure, this person doesn’t want to retire, but then why have a case study on this blog?

Reply
- Mr. Money Mustache May 3, 2012, 2:28 pm
  
  Jimbo, I admire your enthusiasm, but I think you’re missing a bit of the philosophy of this blog. It’s about creating social change in the world’s richest nations and learning about happiness.
  
  The times I get extreme and start throwing around punches are when I hear unjustified complaints and negativity. This case study is entirely positive, and it represents something I really want to see – high-income people deciding to do something other than spend all of their income on themselves.
  
  Sure, I want everyone to ratchet their spending down over time, including me. But you have to START somewhere, right?
  
  Reply
  - Marie May 9, 2012, 7:04 pm
    
    sorry. I agree with jimbo. You’ve been super…SUPER tough on other people. very odd post and very odd reaction on your part. Can’t make this work with your reaction to the couple that made 1/5 and you said: Pick up the F*&a*p;( – broom. This couple has a cleaner — right?
    
    Reply
    - EKA May 9, 2012, 9:39 pm
      
      No we do not have a cleaner, or yard maintenance.
      
      Reply
Paul O. May 3, 2012, 11:28 am

With some aggressive saving, that 1-3 hours a day with kids could turn into 4-5, plus time volunteering at their school. After college, our friend won’t see hide nor hair of them for quite some time, so he’d better get in gear if this is a priority.

Reply
Allison May 3, 2012, 11:31 am

This reader wrote in asking “what next?”. He is clearly intelligent, motivated, and goal oriented. He has a lovely family, no debts, savings, good job. It sounds like he reached all his goals and needs a new project – something to work towards. Maybe starting his own business, foundation, or a physical activity goal (marathons, mountain climbing, etc) would be a good idea. He doesn’t need change or hardship; He needs something to work toward and achieve. In my house, when my husband needs a challenge, he trains for some big outdoors activity. Just a suggestion.

Reply
- Matt May 3, 2012, 12:58 pm
  
  This is what I was going to say. Sounds like this family has achieved economic/financial success. Outstanding! Maybe it’d be fulfilling to move on to physical, intellectual, artistic, or social success? Do you have the strength to bench press 300 pounds or the endurance to complete an IronMan? Do you understand the fundamental philosophical problems of being human? Can you explain these to your children so they understand all sides of all the arguments humans have? Can you compose music or write poetry? Have you influenced any significant number of people to alter their lifestyle for the betterment of themselves and others?
  
  Reply
JanMN May 3, 2012, 11:59 am

Perhaps it’s the right time to read this…

http://www.amazon.com/Mans-Search-Meaning-Viktor-Frankl/dp/0807014273/ref=sr_1_1?ie=UTF8&qid=1336066977&sr=8-1

Reply
- Margaret @ LLNOE June 10, 2013, 5:48 am
  
  Great book!!!!
  
  Reply
andrew May 3, 2012, 12:07 pm

I’d love to see a breakout of the “Misc.: $3250/month” category. With everything else imaginable already listed, what else are they spending a whopping $3250 a month on? Is this the cocaine and hookers expense? I’m calling bullshit on this case study. I think you’ve been punk’d, MMM.

Reply
- Mr. Money Mustache May 3, 2012, 2:31 pm
  
  Why, the fuck, would people send in a fake case study? In what way would that be fun or profitable for a reader?
  
  Do you have any idea how many people accused ME of making up a fake story in the MSN comments section when I described the actual details of how I saved for retirement?
  
  Stop being so suspicious, everyone, and let’s do some learning here instead!
  
  Reply
  - andrew May 3, 2012, 3:28 pm
    
    LOL. I’d have fun reading either way.
    
    I think he’s fooling himself if he thinks he can “quickly cut down to about $3200/month” if he lost his job. Right, he’s going to cut his spending by 80% overnight. I think he might be overconfident in his abilities here. Surely he and his family have grown accustomed to a certain lifestyle and there will be difficult psychological barriers to overcome in downsizing. Most people are incapable of just cutting a $5 daily indulgence and this guy is going to magically cut $460 worth of daily indulgences. Uh huh, sure.
    
    Reply
    - Mr. Money Mustache May 3, 2012, 6:56 pm
      
      We’re on the same team here Andrew, and I really like your Mustache avatar. But with comments like these you’re missing one of the Unspoken Rules of Mustachianism. So I’m now going to speak it for you:
      
      When someone claims they can do something positive, you assume that they CAN do it, and you encourage and support the positive behavior. There’s no benefit to second-guessing, other than being able to say “I told you so”, which is a negative outcome. But there IS a benefit to supporting them: making them more successful and creating self-fulfilling prophecies.
      
      This is much like the “Harvard Law Superstar” case study, when a flood of other lawyers showed up and told the guy he wouldn’t be able to make it if he started his own business.
      
      Fuck that sort of advice! Given that we don’t know these people and their situation, and given that they have proven exceptionally successful in the past, let’s assume they are the awesome and badass people they believe they are, and support their efforts. This is the Mr. Money Mustache blog, where we make our own rules and do shit that society told us wasn’t possible. See the article “the Magic of Thinking Big” for more on this topic.
      
      Reply
      - Shanna May 3, 2012, 10:04 pm
        
        Woot!
        
        Reply
      - W May 4, 2012, 7:25 am
        
        I’m going to gently disagree here and say that while I agree that we should support a positive attitude and I actually believe that in an emergency he could, the fact that he isn’t spending at that level now means that it would be some sacrifice. In particular I’m pretty sure he would have to pull his kinds out of there school. That’s not going to be an easy move to make.
        
        Which means that at the end of the day he is tied to that 400k a year salary. Certainly not as tightly as I’m sure most of his coworkers are but attached nonetheless. I really think he should figure out what the minimum per month his family would be happy with living on for ever (not emergency mode) then push to get his savings to a point where he could cover that.
        
        The goal is to make sure that you really are working because you love it, because if you stopped it wouldn’t have any financial impact.
        
        Reply
        
        Diane May 4, 2012, 10:09 am
        
        Againk, with the school? I’m amazed at the number of folks pouncing on the education costs. If hardship struck, surely MOSt other categories can go before forfeiting what you believe is the best environment for your kiddos, yes? We’re not rich, by any means, but sending our kids to their private school means more than any “experience” or merchandise in the world. It’s not about rubbing elbows with the elite. It’s about keeping my kids from picking up the word “Fuck” in Kindergarten or learning about school bus blow jobs in the 4th grade. These are real examples from our local public school. Quality teachers? You bet? Endless options? Surely. Call me ridiculous, but I’d just as soon teach my kids the value of hard work and treating others with love positively, instead of learning how “not” to behave from their diverse school population.
        
        W May 4, 2012, 10:45 am
        
        I think you are misunderstanding me. I have no problem with the education expense, I agree with MMM that the point of all this isn’t that there is a “correct” amount of consumption.
        
        My point is that it looks like they can cover their “Emergency Mode” spending with there current savings (an awesome achievement regardless of you your income level) But that while he can probably drop a lot of his expenses into emergency mode with without too much pain (scaling back vacations, dropping some of the Activities…) he is counting on being able to drop some stuff that is going to be hard (the school tuition is one, the activities are probably another).
        
        I think he should create a second budget that doesn’t include the true luxuries (for me that would be the vacations, and probably a lot of the “misc” category) and figure out how much he needs in the bank to cover that forever. Then you can really say that you are only working because you love it.
      - Joy May 4, 2012, 9:57 am
        
        Well said, MMM!
        
        Being in one’s corner and, cheering them on!
        
        That is a great charity in itself!
        
        Reply
      - andrew May 4, 2012, 10:14 am
        
        I’m all for being positive and encouraging, but blowing smoke up someone’s ass by pretending that cutting spending by 80% is going to be easy… not so fast, MMM.
        
        I’m sure some of his expenses can more easily be eliminated than others if the need arose, like the $2500/month on travel, and maybe the $3250 is miscellaneous (whatever this category consists of). But the fellow says that 40% or his spending is on his children alone. What’s he going to do? Yank them out of the $3667/month private school like it’s no big deal? Or cut off the $1500+$850/month his children spend on activities and camp? Obviously this isn’t impossible. Going to public school isn’t going to kill his kids, nor will entertaining themselves with free activities, but you don’t think this might be met with some tough resistance? Resistance from both himself and his wife since they consider these expenses to be investments in their kids and their future. And resistance from his kids since they’re probably accustomed to this way of life, going to the school they go to, and doing the activities that they do.
        
        Think about making this kind of dramatic change in your own spending but in the opposite direction. How easily could you double your monthly spending on unnecessary things? I know I couldn’t do it. I challenge you to give it a try. For the next few months instead of riding your bike, try driving everywhere you go. And instead of watching stuff on Netflix, take the whole family to the movie theater a few times a week. Drinks and popcorn for everyone. And forget about cooking at home, you and the family are now going to eat at expensive restaurants several times a week, and you and your wife will each have two alcoholic drinks from the bar with your dinner.
        
        Reply
        
        W May 4, 2012, 11:08 am
        
        I think this is an important point. Most of the post on this blog are about achieving FI at any income level. This family is no where near that. Yes they can “survive” on there savings but it will be a shock. I can’t see which items are in the emergency budget or not in my browser but since the total less that the school fees then he is no where near FI. If his company gets bought and the new management decides that for 400k they should be getting 2.5 of the 3 hours a day he gets to see his kids he can’t just walk away with out making drastic changes.
        
        If you divide his numbers by 4 we could have someone earning 100k a year spending 4k a month and claiming he could drop his spending to 1k in an emergency, which could be covered by his savings of ~300k. There are probably a good number of readers here who are close to that. And I think we would say that they should push to get the spending down and the savings up so that they can cover their real monthly costs with a safe withdrawal.
        
        In fact he should be even more inspired because its a lot easier to find a new 100k job then a new 400k job.
        
        Joy May 4, 2012, 2:35 pm
        
        I have enjoyed this post and, the comments for the
        most part.
        
        I hope this family continues to be happy that they shared
        their lifestyle. I hope that they only hold onto the positives
        to be had here.
        
        I say well done.
        
        If you do decide to give more let it be from the heart. Not,
        from feeling judged.
        
        I hope you keep your children in the Private School. However, I learned the hard way private school isn’t always
        a safe place. Their can be children in private school that
        are there because they have been expelled from public school. I didn’t know this. Like I said, the hard way.
        Know the background of your kids friends.
        
        I think you both have what it takes to make ends meet
        regardless of income.
        
        Enjoy life.
Tara May 3, 2012, 12:13 pm

Being clearly more paranoid than this individual, I would be reducing my spending and saving more, in order to finish accumulating my retirement funds in case one day the job goes poof. Especially since so much of his income is bonus (which is not guaranteed salary and could fluctuate easily).

Reply
- Liz May 9, 2012, 2:43 pm
  
  This is true. I would like to see his background and see if he’s ever actually had to be frugal. If so, it will be significantly easier to cut back if he had to, than if he has never experienced hardship.
  
  For some people who have not had to struggle, they may not realize that it CAN go “poof!”
  
  Reply
Sauce May 3, 2012, 12:18 pm

I dont take this reader submission as cocky, but i definitely think the reader isnt getting it.

Big time kudos to paying off your mortgage/car loans, but he is far from achieving FI and that is what makes someone a level 10 mustachian king.

so far, he’s done a great job of categorizing his spending (except for MISC), now he can start chipping away at it. He doesnt have to explain spending on kids, we get it – thats where you want to invest your time + resources, but car repairs? c’mon.

realistically, this guy could be done working in the next few years.

Reply
Red Cedar May 3, 2012, 12:51 pm

There are a lot of people here suggesting this fellow should work less – but as much as that is the goal of frugality for many of us – it’s not entirely realistic in certain high-performing professions. To drop one’s hours is to be seen as “not a team player” and things like the annual performance bonus would surely disappear. While the original poster might be able to get by on only half his salary, it doesn’t sound like cutting his number of working hours is desirable (or even on the radar).

I tend to agree though, that only having 1-3 hours a day with your kids is missing out on a lot of their lives (I suspect he is most days only getting one hour) – and I have a pretty strong ideological opposition to private school (my daughter gets a fabulous education from the east side high school she attends in Vancouver – despite the fact we are in a low-income catchment). So I wonder if that’s something he can attend to in terms of both his own involvement and the kind of life lessons his children are going to learn (or not learn) if he keeps them cloistered among the rich.

Like the other posters here, I don’t really understand what his question is – except that it seems to be existential. Life is comfortable, now what? Is like asking what is the meaning of life. Now that my physical needs are attended to, what else is there? Like MMM I tend towards an answer that involves nature, a creative pursuit (whether that be woodworking or art or writing or welding), some community-volunteering, and possibly some spiritual work (that’s not my thing, but it works for some).

It seems to me that the original poster is writing because despite having everything, something is missing – and I don’t think the answer will be found in saving more money or giving more of it to charity (though I really support giving more of it to charity). I don’t think the answer will be found in changing the kids schools (I only mention it above because it’s probably better for them in the long run) or driving different cars. At issue here is the basic howl of the human condition – and while that is its own riddle, we certainly have things which can guide us towards our own, individual (and social) answers.

Reply
Matt May 3, 2012, 12:57 pm

I have a friend in a very similar situation, albeit without the huge spending. The friend feels indifferent about his job, except that he hates the 60-hour workweeks. In previous years, he wasn’t so much a spendthrift but one who didn’t critically track his spending, going mostly off of intuition. Debts were paid, credit cards bills were paid in full every month—nothing outrageous relative to the reader presented here, but outrageous relative to MMM.

The friend felt “trapped” in that he knew he had inflated his lifestyle beyond his previous, non-mid-six-figure income, yet was getting increasingly frustrated with the lack of time he had to spend with his family. Late last year, via a more general frugality blog, he got wind of ERE, and in turn, MMM. He read YMYL, and, with his wife, made a 2012 resolution to carefully track all spending, and do a weekly review of all expenses. He actually started by reviewing his previous spending over the last few years, and realized that he pretty much spent his entire salary (but had saved the bonuses).

2012 has been a great year for this friend. Mostly for the sake of his wife, he decided to start slowly—no major lifestyle changes, just efficiency, “cutting the fat”, and the weekly expense review with his wife. Already, spending is measurably lower than previous years, and he doesn’t feel at all deprived. His stay-at-home wife does more intelligent household shopping. For himself, he used to buy a lot of “toys”, but this year has only bought one (which was $10, relative to $250+/month in previous years).

One thing the friend often struggles with is time versus frugality. Many problems that could be solved frugally require a significant time commitment. For example, DIY maintenance/repairs and biking. The monthly cost of the house he rents plus gas and electricity averages around $3k/month. His job is in the downtown of a major US city. He takes a train to work for a 30-minute door-to-door commute. Biking would certainly take longer, and he doesn’t want to give up any more family time than he already is. The one luxury that he and his wife refuse to give up is living in an actual house with a yard. Moving closer to downtown would require giving up those house+yard, or spending even more money. Moving farther away would reduce housing costs, but at the expense of commute time.

For the friend, one of the most profound takeaways from YMYL was the concept of reviewing all expenses, and judging each and everyone in terms of “happiness effect”. E.g., “that $100 I spent on whatever didn’t really do that much for me… kinda feels like a waste now.” I think that a principle everyone can appreciate, regardless of income. If you can spend less money without any negative effect on your happiness, why wouldn’t you? It’s that much more to save, invest, give away, whatever. Just because you love your job doesn’t mean you can’t create your retirement fund now.

Reply
- Bella May 3, 2012, 1:32 pm
  
  Yea, but the YMOYL math doesn’t work for highly compensated people. When you make gobs of money – the equivelant ‘time units’ are REALLY SMALL, and it’s easy to justify any expense – until you’re used up all the gobs of money.
  
  Reply
The Voluntary Worker May 3, 2012, 1:04 pm

Personally, I like to live a simpler life than that and I have discovered that I really like doing things (even sweaty, hard-work things) for myself.

I find it satisfying (and reassuring) to live on WAY less than I make.

It’s a bit of a game – makes me feel like Bruce Wayne or Clark Kent… Tiny spender, probably look broke to others, but big bank account :)

Reply
Dragline May 3, 2012, 1:04 pm

Shoot. Remind me never to submit myself to the hazing here. ;-)

Well, when most people get their “FU money”, they become modern-day philosophers like Nassim Taleb. But that may only be the single ones. On the other hand, maybe Rich & Perfect should start a blog or write a book.

Somebody wiser than me once said that all problems and successes in life can be put into three categories: (1) Livelihood (Work/Career/Financial/Hobbies); (2) Health; and (3) Relationships (including with other people and spiritual).

So it seems like Rich and Perfect has item 1 licked. Item 3 looks good at least from the immediate family perspective, but maybe its not all rosy in all ways — hard to tell. Item 2 is very unclear — I note there are little to zero expenses having to do with exercise or physical activity, unless its hidden in Miscellaneous or something. Could be a red flag, but if he enjoys life, he ought to be working to make sure his goes on for as long as possible in as healthy a condition as possible.

As far as the expenditures are concerned, I would not cut back on anything that saves time — and in fact if there are things that you or your spouse do not like doing and don’t particularly care about, I would consider hiring someone else to do them. More time to do the things you like doing = More freedom. Basic principle from YMOYL. And might help someone else out who needs a job.

Reply
GayleRN May 3, 2012, 1:16 pm

At only $300 a month for insurance costs I am thinking this family is seriously underinsured. just insuring house cars and the life of the sole breadwinner for an amount that could replace his income for another decade should seriously cost more than that. Not to mention umbrella liability, but maybe that is why he has such a huge attorney budget.

Since his poverty contingency plan involves his wife returning to work I would suggest that he test out that scenario by having wife seek employment and see what she gets offered. A woman who has been out of the workforce for more than 10 years is unlikely to land a job that would support their current lifestyle. It might be a huge eyeopener to go through that exercise and then create a budget based on that job offer, assuming she even gets one. Especially with the current economic climate, which they are apparently completely out of touch with.

Reply
- Blaine May 3, 2012, 1:30 pm
  
  Agreed on the insurance. That number seems small to me, but we don’t know the details of what it covers. Definitely deserves a closer look.
  
  Reply
- LC May 3, 2012, 5:32 pm
  
  I don’t think this is an unreasonable number. We spend about half this for the highest available tier of auto insurance (for 2 drivers and 2 cars) and for my average size home, plus $1M in umbrella coverage. A large company is likely to offer a good life insurance policy at no cost.
  
  Reply
Mr Llama May 3, 2012, 1:17 pm

I don’t think this guy is bragging or lying at all, I think he is coming to the same crossroads where my wife and I are at now.

It is difficult for high income types to get any good peer advice about money, as proven by the comments here. Most other high earners just want to talk about spending money and lower income earners struggle to grasp the numbers involved.

I love MMM because he is not anti luxury and not about living any kind of extreme lifestyle. I don’t think he is here to beat anyone up about spending money on whatever they enjoy. What I have got from this blog is a fresh realization of what luxuries we take for granted and how wasteful our family is even when we considered ourselves frugal up to a week ago.

I spent my free time going through the whole blog last week and ended up putting my car up for sale and buying a cheap bike. I forgot how much I used to love bike riding as a kid and how much fitter I was. My office is 4 miles from home, WTF have I been driving every day?! I am already spending less time at work and turning down some clients so I can spend more time with my kids.

Like the guy above we have a ridiculous income, a stable financial footing, healthy attitude towards money, currently saving about 85% of income and in my case not even crazy work hours any more. That doesn’t mean we don’t still have a lot to learn and I thank MMM for changing our lives in a way that my kids will probably thank you for when your mustache has turned gray and/or fallen off.

Reply
- Blaine May 3, 2012, 1:39 pm
  
  I have to agree with your thoughts Mr. Llama. I think the idea is to put yourself into a situation where you’re making conscious decisions about your life and money and keeping your eye open for areas to improve. When you don’t have to work, but choose to work, I think your stress levels go down and your sense of fulfillment goes way up.
  
  Even MMM still works, he just doesn’t have to if he doesn’t want to. That’s the beauty of it to me.
  
  Reply
- Dragline May 3, 2012, 1:46 pm
  
  “Like the guy above we have a ridiculous income, a stable financial footing, healthy attitude towards money, currently saving about 85% of income and in my case not even crazy work hours any more.”
  
  You clearly need a punch in the face.
  
  Yes, I am very much kidding. ;-) Keep up the good work, Llama-man.
  
  Reply
- Mr. Money Mustache May 3, 2012, 2:13 pm
  
  Mr. Llama – I am floored by what you have said and hereby give you the MOST MUSTACHIAN COMMENT AWARD FOR THIS ARTICLE!!!!!
  
  Yee Haw!
  
  It has been a while since I’ve dished out an MMCA, and this is a good article to win it for, since it looks like it will get about 1,000 comments by the time we all go to bed tonight.
  
  Trivia related to your final sentence: I’ve been growing out my Mustache recently, and was pleased to notice that there are quite a few grays hiding in there already.
  
  Reply
  - mike crosby May 3, 2012, 5:21 pm
    
    Ditto that.
    
    That’s why this blog is so interesting. Guys like Mr Llama commenting. Wow–85% saving rate! Now MMM, that’s a story I’d like to read;-)
    
    Reply
    - Mr. Money Mustache May 3, 2012, 6:19 pm
      
      I agree .. Llama, do you feel like sending in your inspirational story? If so, get in touch with me through the contact button and we’ll help more of the world’s richest people.
      
      Reply
  - Mr Llama May 3, 2012, 11:51 pm
    
    I spent an hour writing up my llamatastic story and chickened out half way through. I would happily spill the beans in private but I don’t think I’m quite ready for a thorough public face punching just yet.
    
    PS – as an added bonus I think I might be your first avid reader in Taiwan.
    
    Reply
    - Mr. Money Mustache May 4, 2012, 9:30 am
      
      With words like “llamatastic” in your vocabulary, I’m sure it’s a piece of writing we’d all love to read!
      
      Maybe you’ll get further and decide to share it with us sometime in the future. Like next week.
      
      I think you’re almost right about Taiwan.. according to the amazing Google Analytics screen, there were only about 10 unique visitors making 116 visits from Taiwan from 4 cities last month. 0.07% of the blog’s total visits. Who they are and why they are reading MMM, we may never know :-)
      
      Reply
    - uspsfanalan May 4, 2012, 11:17 am
      
      Mr. Llama, that does rock! I admire people that can read something, make a decision and immediately make lifestyle changes.
      
      Do you think that living in Taiwan has caused you to be more aware of consumerism? Where are you orginally from and grow up? How did you happen to find the MMM blog?
      
      Reply
      - Mr Llama May 4, 2012, 1:05 pm
        
        That’s a great question I never really thought about before.
        
        Honestly I don’t think living in Taiwan has changed my attitude towards consumerism but it is easier to live cheaply and there is a lot more respect for people who are efficient with money. In the west there is pressure to pay full price for things to avoid looking cheap while here it’s often the other way around. You are also much more likely to run into middle class people who understand financial independence and already have a hefty income from dividends. I could start a whole blog on this topic, the whole Taiwanese attitude to money is really very different to the west.
        
        The Taiwanese savings rate puts western countries to shame – living costs here (especially housing) can be very expensive but people earning less than US$1000/month still manage to save half of that.
        
        However if you see the number of brand new financed BMWs and Mercedes on the streets when you know that these cars cost twice the US price after tax you will know that consumerism is still alive and well among the upper middle class.
        
        We live a very lavish lifestyle with 2 kids on around US$40k/year so it’s difficult for me to understand how people can feel remotely pinched on anything above $100k/yr (and that’s not because Taiwan is a cheap country to live in, land is in very short supply so starter houses run around $250k+).
        
        I was born in the UK and lived in the US before I came to Taiwan. I recently gave up my British passport to become a Taiwanese llama.
        
        I found the MMM blog when I was bored one day and found amusement by googling various people ripping into payday lenders.
        
        Reply
        
        Liz May 9, 2012, 3:10 pm
        
        Just FYI, in areas where it is common to make 100k+ a year, homes start at 450k and up. (for example, in the suburbs outside of NYC). That’s why some people do feel squeezed and Mustachians advocate for moving to more reasonable locations (where you are less likely to make 100k+).
        
        AEBinNC May 15, 2012, 8:53 pm
        
        I apologize for my slow response. Thank you for your comments. I have been trying to rid myself of consumeristic tendencies. My wife and I save around 30% and we’re looking into making some big changes so we aren’t job slaves forever. I find your example to be inspirational.
- Dave May 4, 2012, 6:57 am
  
  I couldn’t agree with Mr. Llama more. While we’re not in anywhere near the same income category as him and the subject of the reader case study, I still feel as though my family is ridiculously blessed. And, like Mr. Llama, I’ve learned from MMM to re-examine what I had thought was a frugal lifestyle.
  
  Next month, my wife and I are moving to a new home that is 2 miles from her work and 3 miles from mine. I will be giving up my train pass and getting a commuter bike (off Craigslist, of course). This isn’t a hardship. Like Llama, I LOVE biking, and would already be doing it from our current home if the route wasn’t too dangerous!! We have sold our second car. When we move in, the first thing I’m going to do is build, rather than buy, a compost bin using my as yet non-existent carpentry skills — there’s no time like the present to learn some. The second is to do an energy audit (a friend of mine is an engineer in the field) and replace crappy, wasteful lighting with efficient bulbs. I’m not sure I’d be doing any of these things if it weren’t for this blog. And I’m fucking excited to get going!
  
  I know many people are here for Financial Independence — and I’m interested in that too, eventually. But what I really enjoy the most are MMM’s thoughts on how to live a good life when you have everything you need and want. How to trim away the fat of consumerism that slows us down while keeping the real, life-enhancing changes modernity has brought. Our society is incredibly poorly adapted to answer these questions, except by presenting new wants to us on a daily or hourly basis.
  
  MMM helps me sort out the things that give me real pleasure from the things that society thinks I should own. I’m glad to see I’m not the only one here with that perspective. Again, thanks for sharing Mr. Llama.
  
  Reply
Blaine May 3, 2012, 1:27 pm

I’m looking through this family’s life being in a similar situation income-wise but not yet asset-wise. I’ll try to offer a slightly different perspective with that in mind.

It sounds like this gentleman loves his job, which is great. It allows him to do work he enjoys, spend 1-3 hrs with his children every night, and make a very good living. That’s great for him; not many people are lucky to find work that they love that pays this well.

Is the $300k bonus pre- or post-tax? If it’s pre-tax that means it’s about $200k post-tax, which alters the discussion a bit. You’d be looking at a net income of about $288k instead of $400k, which means your savings rate is less than 30%. Savings rate should be calculated on net income.

Can your investment income pay for your basic expenses yet? I’d save as much as needed to make this happen. If something happened tomorrow and you couldn’t work anymore, how much would you need to spend monthly to survive? How much are you making in passive income? Once that’s covered, I think a lower savings rate (and higher giving rate) are justified.

Are you maxing out your IRA’s? It’s possible to contribute post tax to a traditional IRA and do a rollover. This will save you money later. Contributions can be withdrawn without penalty.

Education: we don’t know anything about the type of school or the area where this family lives. There are some states/cities/neighborhoods where the public schools are very bad. It’s possible they chose to live in a lower-cost neighborhood with a lower-quality public school and send their children to private school as that could be considered a variable expense. I.E. worst case you could pull out the kids and send them to public school if you needed to. Schooling for children is a very personal decision and it’s hard to judge someone for their choice in this matter because we don’t know the circumstances.

Misc: Seems like this category needs more detail. $39000 a year in “misc” seems a bit high. I’d try to dig deeper here. My own budget has something like 40-50 cost centers.

Travel: $30k a year in travel doesn’t seem unreasonable to me for a family with paid-for assets and this level of income. That could be cut immediately in an emergency, which gives you lots of flexibility. In the meantime you get wonderful life experiences seeing places most people don’t get to see in their lifetimes. It’s hard for most people to fathom this because it’s 50-100% of their annual income; it’s less than 10% of yours.

Food: I would break this down into dining vs. groceries. That way you can understand your minimum needs.

Children activities: I would be interested to know what these activities are. $18k a year seems high, but they are enrolled at a private school so perhaps sports and whatnot are more expensive there. Seems like a good opportunity to force some scarcity in their lives and make them choose two or three activities, or rather, give them a budget and let them make their own choices. Could be very educational.

I have to agree that car repairs seem high, at $5700 per year. Was this a one-time deal or is it ongoing? Might be time for an upgrate here.

Insurance: with your level of assets/income, you may want to consider an umbrella policy if you don’t have one.

Phone: Seems pricey. Might be an opportunity for savings here.

Cable: This seems like a good area to test your frugality muscle. Cut it out for 3 months and see how it feels. You can always turn it back on.

Water: Seems high, but I guess it probably depends on the area.

Gas: I think there’s confusion on this one. This is natural gas and $30/month is in line with what my gas bill usually is.

Ah, I see now you’ve highlighted the “emergency budget” in italics. $3179 a month in minimum expenses with a base income of $7300 seems pretty reasonable. Are you making this much in passive income? I think that would be my next financial goal if you’re not already. With that in mind, food seems high. Legal fees are mandatory? Some sort of retainer? Phone seems high, and water seems high (don’t need to water the grass in an emergency).

I think the fact that the numbers are big throws some people off. When you look at percentages, it’s not all that bad. Like I said, I’d save more until you know you can live off your passive income.

Most people here want to retire early, and I think their minds are stuck in that mindset. You have no desire to retire early, so I’d just make sure that if you’re forced into retirement, either through disability or a change in the economy, you can still get along okay.

Reply
Rusty Williams May 3, 2012, 1:59 pm

Regarding the bonus, I would really caution you on relying on that bonus as part of your income. If there was a shift in your industry, it would be hard to make up that big of a shortfall. A bonus is what it is and should be treated as such. When you lifestyle has adjusted to a point that requires that bonus, you could be skating on thin ice.

A close friend of mine worked on Wall Street for several years. We had lunch a couple years ago and were discussing the markets as he say them. The conversation turned to some of this friends and their handling of money. His friends in NY who worked on and around Wall Street during the meltdown were getting hit hard with reality. THey would complain about how they could not make it on their $250,000 incomes and since their bonus (often +$500,000) was not going to happen, they were forced to sell vacation houses, etc.

I didn’t really pitty them that much. My friend said they would drop $600 on a pair of shoes with not thought about what they were doing.

Reply

Next Comments

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

Reader Case Study: I’m Rich and Life is Perfect – Now What?

Want More?

Get MMM Automatically By Email

Leave a Reply

connect

welcome new readers

Love, Mr. Money Mustache

latest tweets

As Featured In…

Reader Case Study: I’m Rich and Life is Perfect – Now What?

You might also like:

Want More?

Get MMM Automatically By Email

Leave a Reply

connect

welcome new readers

Love, Mr. Money Mustache

latest tweets

As Featured In…