Is frugality for the rich?

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Farm_or
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Re: Is frugality for the rich?

Post by Farm_or »

Writers can make an edgy statement to shock their audience into attention, but that may end up being the only message conveyed and retained out of context. I have experienced what Jacob is talking about and witnessed that many times.

To the op: the definition of frugal is audience specific. The main stream sees the word in negative terms. It's synonymous with suffering and masochism.

The correct definition of frugal is positive. It is simply the lack of a waste of money. Frugal and industry go hand in hand. "waste neither time nor money" Ben Franklin. Therefore, frugal and rich are synonymous (excluding the rich by accident- of course).

Tyler9000
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Re: Is frugality for the rich?

Post by Tyler9000 »

@SavingWithBabies -- You've read the ERE book, understand it to a level where you can think about it critically and apply independent concepts to your own situation, actively engage in meaningful conversations, and are open to feedback. Target audience or not, you're a good audience. :)

I think Jacob is more talking about actively engaging with an audience where your ideas do not fit in naturally and explaining them requires constant effort. While there are certainly things to be learned from that when it comes to communication content and style to reach more people beyond your personal comfort zone, if you're stretched too far it just becomes exhausting and sucks the joy out of your passion. I get it.

At some point you learn how to pick your battles or even just switch altogether from traveling missionary mode spreading the word in hostile territory to wise old monk in the mountains mode where a self-selecting audience seeks out your advice. It can be the exact same message but two very different experiences for the messenger.

bryan
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Re: Is frugality for the rich?

Post by bryan »

Campitor wrote:
Thu Apr 19, 2018 8:56 am
I guarantee you that the rich, especially the ultra rich, are putting in more hours of work than anyone else.
I guarantee that is not true, or that I am misunderstanding you.

For any rich person, you could drill-down into their sources of income and find many people working harder/longer. Even if you are speaking of averages, I find it ridiculous on the face.

The large system we are in now means money begets money e.g. dividend or rental income. 4% on $1B is (just a bit..) more than 400% of $100,000; exponential returns, leverage, financial structures, economies of scale, monopolies, having resources to take advantage of market gaps..

oldbeyond
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Re: Is frugality for the rich?

Post by oldbeyond »

Is it even possible to spread a message, with no corruption, to anyone, from any position? That seems far beyond the reach of human communication skills. You can avoid the obvious pitfalls of douchery and chauvinism, but someone will always be rubbed the wrong way by you, no matter how sane the message itself is. It is important to see the world from different angles, but at the end of the day you need to do your thing from your very particular starting point, lest the world turns into a place of completely passive GAD-sufferers.

IlliniDave
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Re: Is frugality for the rich?

Post by IlliniDave »

I thought I replied to this thread a couple weeks back but I guess I must have neglected to submit. Going back to the original idea, frugality is less optional as you go down the income scale (unless you consider foregoing debt to increase spending as a form of frugality).

Right now frugality is an option for me (probably the relative frugality jacob alludes to--I live a little sub-median overall but have to compare myself with my particular demographic before I begin stand out). When I pull the plug, frugality and "living within my means" will essentially become synonymous.

In general frugality I think is one of those sort of loaded terms that some people immediately associate with a pathological condition (a hoarding disorder) and others see as an everyday virtue.

The superficial rewards of frugality (accumulation of wealth measured by magnitude of financial assets), especially as you approach the more thorough/extreme form of frugality, are certainly more apparent when accompanied by higher income. If you allow for more of a multifaceted definition of wealth, frugality can be beneficial to anyone.

Campitor
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Re: Is frugality for the rich?

Post by Campitor »

bryan wrote:
Sat Apr 21, 2018 4:48 pm
Campitor wrote:
Thu Apr 19, 2018 8:56 am
I guarantee you that the rich, especially the ultra rich, are putting in more hours of work than anyone else.
I guarantee that is not true, or that I am misunderstanding you.
http://www.businessinsider.com/common-m ... ple-2015-6:

  • 44% of the wealthy worked 11 hours more each week than the poor.
    86% of the wealthy who had full time jobs worked 50 hours or more each week, whereas 57% of the poor who had full-time jobs worked less than 50 hours each week.
  • 88% of the wealthy took fewer sick days than the poor.
  • 79% of the wealthy, on top of their extended work hours, networked five or more hours each month. Fifty-five percent of this networking was done during their lunch hour.
  • 65% of the wealthy were working so many hours, in part, because they had three sources of income to manage. Forty-five percent had four sources of income. Only 6% of the poor had more than one source of income.
  • 67% of the wealthy watched less than an hour of TV a day, whereas 77% of the poor watched more than an hour of TV a day.
  • 63% of the wealthy spent less than an hour a day on the internet, while 74% of the poor spent more than an hour a day on the internet.


https://blogs.wsj.com/wealth/2010/09/30 ... an-others/:

Research by Daniel Kahneman, the Nobel Prize-winning psychologist, shows that “being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.”

His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.


https://www.theatlantic.com/business/ar ... rk/479940/:

Elite men in the U.S. are the world’s chief workaholics. They work longer hours than poorer men in the U.S. and rich men in other advanced countries. In the last generation, they have reduced their leisure time by more than any other demographic. As the economist Robert Frank wrote, “building wealth to them is a creative process, and the closest thing they have to fun.”

jacob
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Re: Is frugality for the rich?

Post by jacob »

Could it be that the wealthy also spend more time on frugality as well?

It certainly requires some elimination of leisure time. I'd also note that for someone who is working in a fun profession (such as say oh academic physics) where average salaries are slightly above median(*), "being frugal is a creative process, and the closest thing they have to becoming wealthy".

(*) Which is 30k/year/person.

Laura Ingalls
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Re: Is frugality for the rich?

Post by Laura Ingalls »

I think the idea that frugality correlates closely with creativity is a pretty logical thought.

I also think it is easier to optimize spending when you have more resources ie cash and space to stockpile things that are a rocking deal/free. A friend with a truck to help you get furniture off the curb.

It’s also more fun to be frugal when you aren’t broke. It’s a choice not an absolute requirement.

Stahlmann
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Re: Is frugality for the rich?

Post by Stahlmann »

@campitor @bryan

How about creating division between real poor and so called rich and meanwhile enjoying being the owner? Let's ponder on it...
Yep, this is not so easy as some guy with beard wrote about 150 years ago, but the model is still valid... Because some real poor people will fight defend the owners... Owners are changing time to time, but not so often (top500 families in Italy back then and now, check it out...).

Ooops, some ever smiling folks from Holy-propaganda city/neighborhood can lie too....
Mobility in earnings across pairs of fathers and sons is particularly low in France, Italy,the United Kingdom and the United States, while mobility is higher in the Nordic countries, Australia and Canada.
https://www.oecd.org/centrodemexico/medios/44582910.pdf
Chapter 6 presents a demographic, geographic, and industry profile of global billionaires. Using data from the 1,645 people on the Forbes billionaires list, I show that they are overwhelmingly white, male, and older and that many benefited from public investments and decisions that aided their sector.
Ooops, so much intiative, so much freedoom!

https://www.youtube.com/watch?v=mCsmqqCdK2c

ARGH, 425th rant on socialism by Stahlmann, instead of working/reading investing books :lol: :cry: :x
I'm accepting donations like this guy with beard in the past :D


For the topic matter, Golden Stahlmann Prize goes to this quote:
This goes back to the joke about how certain online groups comprise people in the 90% percentile income congratulating themselves for spending like the 70% percentile. Of course, this is not funny to people spending less than that .. especially not if they make even less. Basically when people playing in easy-mode get too happy about how they fixed their #firstworldproblems, people playing in hard-more get angry.

Farm_or
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Re: Is frugality for the rich?

Post by Farm_or »

Years ago, a friend related this story to me of hanging out with his multimillionaire (+400 millions) friend. They were killing time in some kind of shopping mall in SF or Berkley?

"I just remembered, I've got to pick something up for my friend's birthday party."

He picks out a shirt and looks at the price tag on the sleeve.

"$70! That's too much!"

He digs through his wallet and pulls out a 20% coupon.

"That's more like it!"

classical_Liberal
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Re: Is frugality for the rich?

Post by classical_Liberal »

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Last edited by classical_Liberal on Fri Feb 05, 2021 12:14 am, edited 1 time in total.

bryan
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Re: Is frugality for the rich?

Post by bryan »

@Campitor, thanks for taking the time to post to clarify.

It seems you were speaking averages (which I sill found "ridiculous on the face"). The reason I say this is that in the system we live, the relationship (correlation or causation) between an individual's work and income is less and less linear-like as they become "rich" ("exponential returns, leverage, financial structures, economies of scale, monopolies, having resources to take advantage of market gaps.."). I think that is the main source of my misunderstanding of what (I thought) you were saying (or implying).

Another thing is how we define, categorize "rich" or "work".

For instance, the first link you shared
The guy defines it as $160,000 or more and a liquid net worth of $3.2 million or more, and "poor people" as those with an annual income of $35,000 or less and a liquid net worth of $5,000. And in the second link you shared (https://blogs.wsj.com/wealth/2010/09/30 ... an-others/) seems to actually just be picking on high-income earners ($100k+) and not so much the wealthy (high networth).

The first link is from a guy trying to sell a book and not a statistical study, analysis (more of a survey + selection/survival bias); not to say it's not useful, in some way. I couldn't find any of the survey data or meta-data.

Campitor
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Re: Is frugality for the rich?

Post by Campitor »

@classical_liberal

I'm not sure what you mean by "should be a consideration in the easy vs hard scale". How and why should it be a consideration? In life, regardless your current financial station, there will always be people who have it harder or easier. So why dwell on it or give it one iota of consideration? It's better, in my opinion, to keep the focus on ourselves and what we can do to improve our means of moving up the income ladder. Focusing on others does nothing but harvest envy unless the primary aim is to get ideas on wealth generation for the purposes of cultivate skills within that stream.

@ bryan

I'm not sure why you find averages/aggregates ridiculous. While we are all unique with unique circumstances, our behaviors fall within certain aggregates that define how we live. What is my definition of work? I subscribe to Merriam's Webster's definition of it: a : to perform work or fulfill duties regularly for wages or salary works ; b : to perform or carry through a task requiring sustained effort or continuous repeated operations ; c : to exert oneself physically or mentally especially in sustained effort for a purpose or under compulsion or necessity.

For this discussion I will focus on sustained effort, mental or physical, for a purpose. While the poor may be working hard physically - I know because I was poor. Food stamps, government cheese, working at minimum 30+ hours since I was 13 yrs old so I could help put food on the table and clothes on my back, etc. But the difference between "poor" and the wealthy starts to separate in regards to the sustained mental effort and the sacrifices/choices that are endured to better one's life. Even "ERE" requires sacrifices and additional work that most are not willing to engage in.
the relationship (correlation or causation) between an individual's work and income is less and less linear-like as they become "rich" ("exponential returns, leverage, financial structures, economies of scale, monopolies, having resources to take advantage of market gaps..").
This ignores the long slog it takes to get to exponential returns - you can't discount this in the work harder category. Just because one is resting at the top of the mountain doesn't discount any of the work or sacrifices required to get there. So yes - the rich worked harder to get to where they are. In aggregate they made better decisions, more sacrifices, and spent more time dedicated to thinking and working on wealth attainment and maintenance than those who are less wealthy.

All of my statements need to be put into context. My perspective is aimed at healthy individuals who live in modern Western democracies who don't suffer from any kind of mental impairment.

bryan
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Re: Is frugality for the rich?

Post by bryan »

Campitor wrote:
Fri Apr 27, 2018 8:44 am
I'm not sure why you find averages/aggregates ridiculous.
Sorry, I'll re-phrase for clarity:
>> I guarantee you that the rich, especially the ultra rich, are putting in more hours of work than anyone else.
> I find it ridiculous on the face, even if you are speaking of averages.

I don't think math is ridiculous.. I already mentioned that I misunderstood you a bit before so my own "guarantee" isn't as sure. My current understanding of what you said is: for all humans (maybe only in the US or "modern Western democracies"), you can graph some rolling average line of "richness" versus "annual hours worked" (you point out that actually the "hours worked" should be "lifetime hours worked", sure, why not) and it will turn out that the line will never have a negative slope (akin to Fish's sweet graph!). This is quite the guarantee and I'm not aware of good/accessible enough data or analysis to show that. It doesn't make sense intuitively given "the large system we are in now...". After all, "the first million is the hardest".

Maybe we can use a metaphor for our discussion: rockets and physics! A greater distance from sea level (0) being "richer" and "hours worked" being the "time of thrust ON" and the rocket representing some ranged set of data with average values. From what I understand of what you are saying, you would suggest that a rocket that is farther from 0 (richer) is guaranteed to have had a greater duration of thrust than any lagging (poorer) rocket. This only makes sense mathematically and physically if you hold so many variables/conditions constant/equal. Change some variables and it doesn't hold. For instance, you can have two rockets with the only difference being "thrust ON" function over time. One rocket will end up farther than the other, despite them both having equal total "thrust ON". I'm not sure the law of large numbers (or.. whatever.. the stuff that might get baked into the transform of humans' data -> rocket characteristics) guarantees a never-a-negative-slope line fit.

Becoming rich is breaking free from certain inertias, difficulties.

Clarice
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Re: Is frugality for the rich?

Post by Clarice »

EdithKeeler wrote:
Wed Apr 04, 2018 2:16 pm

Anyway.... just sharing and am curious re your thoughts, especially since many people here have quite impressive savings rates, and not always with high incomes.
I keep on thinking about this subject. For whatever reason, it kind of fascinates me... Here are some of the thoughts I would like to share:

1. Frugalwoods' frugality is pretty. That's why there are so many pictures on their blog. The narrative that goes with the pictures is very alluring as well: wholesome bulk foods (assumes access to cooking facilities and ample storage space), a cute baby dressed in awesome hand-me downs (assumes a rich social network), free winter fun (assumes access to such a pristine snow and, thus, a car). The frugality of people with impressive savings rates on low income is not pretty. Participation t-shirts look ugly after a few cycles using self-made detergent. Reusable handkerchief that you are using while having a cold is meant for tell, not show. Daniel Suelo's teeth looked bad before some dentist fixed them for free. The real choice the people on low income face is being free and in peace with the fact that many aspects of their lives do not look presentable or being presentable slaves. Presentable frugality while reaching FI is indeed for the rich.

2. Free and not presentable looks very good if you compare it to true poverty. Poverty is a trap (described well in the book of Barbara Ehrenreich Nickel and Dimed). If you get into this trap you then need to be very cunning to get out of it. Most people don't make it, but some do. Their stories would not lend themselves to a quaint blog.

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Re: Is frugality for the rich?

Post by Farm_or »

I don't know what to make of that? Like watching the Disney channel and somebody changed it to Fox news?

It sounds a little bit like form over function? Or fear of failure? Or confusing frugal with poverty?

I can close my eyes in a Toyota Celica and imagine that I am riding in a Bentley. The only people that know the difference are the snooty ones watching, but I don't care much for their definition of "style" anyway...

Campitor
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Re: Is frugality for the rich?

Post by Campitor »

bryan wrote:
Fri Apr 27, 2018 8:44 pm
This only makes sense mathematically and physically if you hold so many variables/conditions constant/equal. Change some variables and it doesn't hold. For instance, you can have two rockets with the only difference being "thrust ON" function over time. One rocket will end up farther than the other, despite them both having equal total "thrust ON".
This is my exact point. 2 rockets yet 1 goes farther or faster. The variable being time on task versus total time on thrust. One person spends more time optimizing her rocket, picking the best launch site closest to the equator to take advantage of the increase thrust harnessed by the earth's rotational speed. She spends more time analyzing her supply chain to source the best materials as cheaply as possible or she builds it inhouse for more savings in order to be able to build a 2nd rocket or upgrade her existing rocket. When the rocket does launch, she continues working on optimizing her trajectory, maintaining her equipment, and making course corrections as needed in order to minimize duration of travel and increase the likelihood of success.

The other rocket engineer/pilot (poor) makes suboptimal choices. He spends more on equipment and launches further north which increases his fuel costs, etc. Once his rocket is in space, he is full speed ahead but with little thought to travel optimization as he wastes time watching reruns of Lost In Space in his flight cabin.

Both pilots are are in their respective rockets the same amount of time (24 hours) but only 1 pilot is spending time maximally/efficiently in order to achieve a better or quicker result. This is what I mean by "working harder". All faculties, mental and physical, are expended - no time for watching Lost in Space reruns or getting disgruntled about which rocket had it easier - the focus is 100% on task for a greater percentage of a 24 hour day. This is the essence of working harder.

And to get back to the is frugality only for the rich, I say NO. I came from poverty and the only way I managed to crawl out of it was being frugal, maximizing my dollars, and working 2 jobs (70+ hours). There was no time to envy the rich or lament my station in life. It was all about working harder and smarter.

We are all chained to fortune: the chain of one is made of gold, and wide, while that of another is short and rusty. But what difference does it make? The same prison surrounds all of us, and even those who have bound others are bound themselves; unless perchance you think that a chain on the left side is lighter. Honors bind one man, wealth another; nobility oppresses some, humility others; some are held in subjection by an external power, while others obey the tyrant within; banishments keep some in one place, the priesthood others. All life is slavery. Therefore each one must accustom himself to his own condition and complain about it as little as possible, and lay hold of whatever good is to be found near him. Nothing is so bitter that a calm mind cannot find comfort in it. Small tablets, because of the writer's skill, have often served for many purposes, and a clever arrangement has often made a very narrow piece of land habitable. Apply reason to difficulties; harsh circumstances can be softened, narrow limits can be widened, and burdensome things can be made to press less severely on those who bear them cleverly. - Seneca

Clarice
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Re: Is frugality for the rich?

Post by Clarice »

Farm_or wrote:
Mon Apr 30, 2018 6:36 pm

It sounds a little bit like form over function? Or fear of failure? Or confusing frugal with poverty?
NO-O-O! :o What I am trying to say (very clumsily as it's turned out :lol: ) is that there are various levels of difficulty in achieving FI depending on one's starting point. One is better off being aware of them. Frugalwoods' starting point has made their blog very attractive and their journey - relatively easy. In reality, their situation applies to a very narrow group of people. However, their audience is quite large. Many of these people felt cheated when they learned their true circumstances. The vast majority of people need to adopt much more extreme measures than Frugalwoods to achieve FI. Since the starting point of this debate was referring to a blog I've mentioned the parameters of the blog itself - it does have an attractive form. I did discuss challenges and had no idea that it would evoke associations with fear. The biggest challenge is starting from the position of poverty. Let's say your mom in her attempt to feed you as a teenager impersonated you and took loans in your name, which she did not repay? :cry: Well, fear not! FI still can be done, the very hard way. :)

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Re: Is frugality for the rich?

Post by jennypenny »

I would say the difference between 'easy' and 'hard' is the number of paths available to someone to achieve whatever the FI goal is. The better start you get and the better decisions you make, the more options you have, but capitalizing on them (or screwing it up) is more a reflection of the individual than circumstances.


Is the ability to choose the only difference between frugality and poverty?

Farm_or
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Re: Is frugality for the rich?

Post by Farm_or »

@Clarice - thanks for the clarification.

Could be a nagging problem of my own? The powers of perception. Not just me, but the appearance projected on my loved ones.

Self esteem is very important. Although we may be at a different level, I worry about others being negatively impacted by outside influences. My grandma taught me very early that there is nothing wrong with being poor, but that was in no way excuse for being slovenly.

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