The No Equity Life Style
I have mentally struggled with this situation for many years. My family was extremely frugal. So frugal in fact that my mom did the majority of shopping at Goodwill and had an advanced method of switching the tags so she could get better pricing. She would even purchase the clothes and then take those tags off and put them on a different pair of clothes we out grew. This was clearly dishonest and I have never stooped this this level myself. If you aren't from the United States Goodwill is a second hand store. It is like going to a garage / yard sale that is inside. All Goodwill stores smell the same way for some reason. Kind of like a couch that has been left in a shed since 1972.
I'm not complaining I'm just stating the facts. This frugal nature has rubbed off on me as well and I rarely buy new clothes. We did have certain things that were nice and the best part about growing up where I did is that we had privacy and 36 acres of land. I did a lot of work for farmers growing up and was able to purchase dirt bikes, four wheelers, snowmobiles, and an ultralight aircraft. Honestly I had a lucky childhood in a lot of ways.
Making Payments
By the time I was born my parents already had the property paid off and also had a rental house which was the next property over paid off. They did this by just being super frugal and pinching every penny. They also never made payments on vehicles. I remember having a girlfriend in high school that had car payments to make and all her family members cars had loans on them too. That was really weird to me.
I have continued this trend of NOT making car payments by driving a 2001 Pontiac. It isn't worth much at this point but it runs well and it doesn't cost me much to operate. I don't have a problem with this but once in awhile it kind of gets to me when people almost act like I'm some scrub because I drive an older car. Then you realize they have a 6 year note on their car.
Don't get me wrong......I sort of get it. It would be fun to drive a new car and all that. I just don't want payments on stuff.
I FUCKING hate the fact that I don't have my house paid off yet. I almost have it paid off but still just putting in the sacrifice month after month. I have a 15 year note and have really been chipping away at the principle but it is like the struggle never ends. I feel like I should have had it paid off by now. But then again it is just me over here.
Ultimately sometimes I wonder if the struggle is worth it and if I shouldn't just have a 30 year note and make car payments for 7 years and have rented furniture and live the No Equity Life Style.
The Conundrom
We can die any second. We will often hear about people in their 20's dying in their sleep. Or some random car accident takes out a whole family. Sometimes I just want to sell out of everything and travel the world and ball out of control.
Don't get me wrong my life is pretty cool but it could be out of control if I liquidated this property and then applied some leverage and just went rock star status. The struggle is real. I keep thinking in the back of my mind that if I can become "Bitty Rich" that all my problems will be solved! Below is the car I want to get if this happens.
What do you think Steemit? Have you also dealt with the mental burden of putting in the sacrifice vs just living a no equity life style and living it up?
Credits: The car is a Vaydor. There are only about 20 of these in the world and it is was designed by Matt McEntegart in the Tampa, Florida area. Visit their website at http://vaydorexotics.com/ to find out more information. If you have seen Suicide Squad that is the car that the Joker is driving!
The irony is that in today's world of super low and even negative interest rates, savers are punished. People who live beyond their means (and government is the worst offender) will potentially make out like bandits when irresponsible money printing causes hyper inflation and debtors can pay off their loans with worthless paper. No good deed goes unpunished, or so it seems. However, I think it will always be good advice to live within your means and accumulate tangible assets that you can actually keep in order to use or as a store of value, rather than expensive toys.
It sure does seem that way. One of the strategies I was hoping to possibly use was when this next financial disaster comes and everyone gets blown out of all their toys I could be soaking up the toys on the cheap. I saw it happen in 08 and 09. People trying to get rid of sports cars, boats, ATVs......etc. Here in Arizona I watched 4 people strategically walk away from their houses and they seemed to turn out better off then the people who stuck with their under water investments. So it certainly changed my opinion on that. I was never in that situation though.
I listened to a podcast with a successful trader the other day, and he has an interesting view on wealth acquisition and spending. He believes that any money unspent when you die is completely wasted (ignoring what you leave to offspring or family members in need), so there should be a net worth curve that peaks sometime between age 50-60 and allows you to maximize your experiences. So now he is committed to things such as spending each summer in a new country or city in Europe and really immersing himself, traveling the world, partying, trying new things, and spending more money than someone in his position might.
For instance, let's say you really love sex. You're not going to be an 80 year old man slaying, you should try to get the enjoyment out of sex that you can over the next 20-30 years. Same goes for a hobby like skiing. Say you want to ski 1000 times in your life, you should probably do the bulk of that now and not plan on doing it when you're older.
Life events do cost money, but they pay dividends later. An acquaintance of mine recently fought an amateur MMA fight and won, he will have the rewards of that experience paying off for the rest of his life in terms of confidence, story telling, memories, etc. Don't miss out on things you want to do just because you are pinching every penny and putting it all towards your house, because you may not derive as much pleasure from these experiences at an older age. And having a nest egg built up that goes unused by the time of your death can be looked at as missed opportunities for life experiences.
I agree. It is such a tough balancing act. I love the 80 year old man example. Straight slayer at 80 years old. LOL
Its a battle, everyday once you open the Eyes, you must outperform breathing and attract success.
Its difficult, as a root, to find the light out of soil... but we are intelligent, ;)
Invest in your food, food, water.. cryptocurrencies: bitcoin, dash, ethereum, steemit ;)
@amor It is a battle! But what about investing in Monero?
Im buying some for first time right now on exchange :) ...
@amor Cool. I was one of the original Monero miners back in 2014 but I took some hard hits and had to sell out. It was really painful. I started mining it when it was worth $3.00 and had to throw in the towel when it was worth $0.50. Their main dev @fluffypony is wicked smart
Debt is a vicious cycle, and perhaps the most likely financial factor to inhibit the growth of wealth over the course of generations, (ensuring that the poor stay poor and the rich stay rich). It's great that your parents were able to increase their wealth by being frugal, but the opportunity to do so often tied to some form of privilege, whether earned or unearned - their case study stands in contrast to the millions of working poor, and extremely impoverished people inhabiting the globe - who are unable to increase their net worth or buying power despite working very hard, and spending frugally as a default because they have precious little alternative. Still, this article is great advice. :)
Yeah the way they were able to do it is by living frugally through college in a trailer. They then were teachers for several years living in the same trailer they pulled to the school district they worked in. Then they were able to get comparatively high paying jobs working for a General Motors. So they had decent pay in comparison to how frugal they were. They still live extremely frugally and everything is paid off. In my mind they have never really got out and enjoyed their savings. They are very simple and don't really like to travel for some reason.
Great article @brianphobos, well written. I hope you get the car one day, once the mortgage is paid off!
Thanks! I just have to get bitty rich!
Brian, you can read my intro on my blog if you want. I have had ups and downs all my life, a five star life style and quite the opposite, but in the end, the best things i take with me are the memories of the great laughs I had with friends, family, the women I have loved, the cool places i have seen, and the experiences of my spiritual journey. I don't care to be the wealthiest man of the cemetery. ("here lies the richest guy in the cemetery"). I know a lot of rich guys that haven't been to almost fifty nations like me, and I'm not rich, but i did it, sometimes on my money, sometimes on other people's (companies) money. By the way, you can rent a Ferrari for a weekend and get that one out of your system pretty easy! Ciao from Italia
@matteo2016 Yeah I don't intend on being the wealthiest man in the cemetery either and right now I don't have kids. Some day my perspective my change about looking out for family that would get the money more. I hear ya about renting the Ferrari or Lambo for the weekend. It makes sense and sometimes stuff like that is better off rented. Same sometimes with jet skis , snowmobiles, etc. Just kind of depends on the situation. Congrats on going to 50 nations. That is pretty awesome! I have only been to 3. :-( Just North America. So I really do want to get out there more and travel around.
No equity life style will get you sooner or later!
That is what I have always figured but sometimes I wonder. I have seen people do it and just ball out of control hard for a long time and then file for bankruptcy. In the United States you can sort of just reset the deck like that and wash everything away. In fact that people that I bought this property off of filed for bankruptcy and they seem to live a better life and have nicer cars than I have. So I don't know. I know that seems like a weird way to look at it but if a person just said screw it and went for it really hard in business and then got washed out. They could reset the deck.
Financial IQ is the key
Without dreams life is fruitless, Living without some degree of fear is dull
I agree. I try to live on the edge as much as possible without getting killed. You might have seen my cliff jumping post but here is a pic of me doing a hand stand at Glacier National Park in Canada.
You are on the other end of the spectrum. Debt rules most people. Don't give up, but treat yourself a bit a long the way.
If you are in debt, read this https://steemit.com/life/@pairmike/are-you-a-slave-i-was-a-slave-to-the-american-dream-learn-how-i-escaped
I read your post and upvoted. I still feel like debt rules my life even thought I almost have my house paid off. If I could get out from under that then my situation would be so much different.
Getting you house paid off should help. What other things are you struggling with debt wise?
I have an online resell business and so I always need capital to purchase inventory. It has caused a lot of problems in trying to grow because I don't have the resources to really expand.
What do you sell? What is the URL to your site?
Great post. I have noticed that a some wealthy people are quite frugal and one can sometimes wonder if there is some sort of causal link.
I personally think that whilst you shouldn't live recklessly it also makes sense to enjoy your life and spend as much of your money as you can before you die.
Your kids should make their own lives anyway. I don't believe in big inheritances and there is no way to take your money with you when you die.
Also I want one of those Darth "Vaydor" cars!