Thanks for all the answers everyone!
First off, sorry about the confusion, I'm not down to 3 - 4 Jacobs, I'm aiming for that over the next year. I'm still at the 8+ Jacob level and only recently started lowering my expenses from there.
bostonimproper wrote: ↑Thu Dec 26, 2019 5:29 pm
In terms of pay-to-play, if you're high salary in a HCOL or VHCOL area and down to 3-4 Jacobs, the thing you're probably spending the most on is comfort and personal energy in the form of housing and transportation options that get you your own bedroom with a <60 minute commute, not social capital in the form of baby Mandarin. You could argue you are probably spending on social capital by not living in a car, van, boat, or RV like Jacob did or by living in a safer neighborhood or by not doubling up rooms or by taking the job in the first place. But all that is still a few Wheaton levels away from multi-thousand dollar toddler ballet.
I'm not sure I can be much lower than 3 - 4 Jacobs without moving away from the Bay Area which has become clear after bostonimproper's answer. I drew up fishbone diagrams for a long commute, a short commute (walking or biking distance), living alone, and living with roommates (without my own room which seems the primary way to lower rent significantly below $1200 a month [a number easily doable with a private room in a shared place]). Given my personality, sharing a room is a large net negative and a long commute is a smaller net negative.
I tried the van thing temporarily and while I think I could do it better if I tried again, at this point, it's not for me.
FBeyer wrote: ↑Wed Dec 25, 2019 8:04 am
You shouldn't be in the process of lowering your expenses.
You should be in the process of finding out what your life is about, and designing accordingly.
In other words: Say no to EVERYTHING! Absolutely everything, even ERE, and start adding back on the vital parts of your existence.
In time you'll find that the complete lack of friction sets you free to make better choices.
Learn what to keep, not what to throw away.
I agree with this. I'm planning on trying the no spend exercise mentioned in the Yields and Flows thread:
viewtopic.php?f=3&t=10897 which I hope will give me insight into what expenses matter and also provide opportunities for me to improve my DIY/bodging/creative frugality skills since I won't be able to reach for my current hammer.
Is there any reason I shouldn't phrase that as "lowering expenses" though? The ultimate effect given my current level of expenses is that they will be lowered.
Scott 2 wrote: ↑Wed Dec 25, 2019 9:24 am
IMO there has to be a bigger driver than money to sustain 1-2x Jacobs, especially if you are high earning. A strong belief in conservation of resources, intense interest in a low cost hobby, an overwhelming fear there will never be enough, or something like that. I don't have it.
On the other hand, efficient systems can get you to 3-4 Jacobs, while freeing both time and energy. That can be very complementary to the high earners life. Getting work to carry costs can help too - benefits, company meals, networking events, internet/phone reimbursement, education, stacking personal travel on top of corporate trips, etc. It'd be disingenuous to do that and claim to live on 2 jacobs, but it's a very effective financial tool in the high earner's box.
Thanks for the link, Scott! I also get a lot out of my work benefits. My motivation to get to 1 - 2 Jacobs at this point is to most quickly and safely have the opportunity to leave my job and also as a benchmark that shows I have strong Renaissance skills.
@c_L What you are saying about the number not mattering in so far as one can be at that number or not at that number at varying Wheaton levels makes sense, but I'm still think it's useful for me to think like this: If I were to move from the Bay Area to a LCOL area and keep most of my system besides working, what level of expenses would I be at? If I think it's around 1 - 2 Jacobs, I'm probably okay to quit and move away at any moment and be FI and have time to get to being ERE eventually.
classical_Liberal wrote: ↑Thu Dec 26, 2019 3:29 pm
... But is still spending way too much money and does not understand why. Then they are probably trying to buy more of some form of limited resource in their system. There is a factor(s) in their system they haven't considered and it is costing them.
I really think the high income conundrum is that to earn a high income, there is almost always costs to other forms capital. Time, social, family relationships, general energy, mood, ect. Since we are not measuring these directly, all we see are the financial outflows going to make up for lack of capital in these other areas. Keeping up with Joneses behavior to keep up socially, paying for the "right school district" for kids in family, restaurants and personal shoppers for time, expensive low energy hobbies for energy, psychologists and antidepressants to improve mood. A person making 100K or 200K a year, who is relying on these spending activities to keep "equilibrium", simply can't just "turn it off" to 1-Jacob of spending AND expect to continue to earn high income in the same situation. The system would collapse. They intrinsically, but maybe not consciously, understand this, hence the ever maddening spending behaviors once they realize others are doing such a better job in the spending realm.
In these cases, the question should be, how do I get more time, social, family, energy, or whatever area(s) that's lacking without spending money? EDIT: The worst case here is that to maintain the high income, all other resources have been already depleted. Money no longer buys enough of what we need. At this point it's tough to even "get off the couch", so to speak, and make progress on lower Wheaton level activities.
Whoa, thanks! Is this the kind of thing you're talking about? I've been thinking that if I was more physically fit, spent more time outdoors, and got better sleep, then maybe my stress would be lowered enough that I could manage having a roommate again. Maybe if that part of my life were on track, then I wouldn't have to pay extra to limit my interactions with other people. Getting fit would be a free way to lower my stress and maybe I could move in with a roommate once that was established.
classical_Liberal wrote: ↑Thu Dec 26, 2019 6:05 pm
OTOH, I also think high earners have "other" resources not available to many at the median level, that are directly related to having these types of jobs. I think there may be some poor use of these "extras" which contributes to the high level of spending and/or some habit formation around these extras that yield unhealthy nonEREesque results. It's also very important for the aspiring FI ERE'er to understand what all of these things are, because many are very subtle and they will bite you in the a** if/when you quit your job. I have personal examples of these types of unexpected situations if anyone's interested. They were not easy to see, even as the impacts to cashflow are obvious.
I'm interested in hearing what situations you were in here. My work provides a lot of benefits, so I will probably be in a similar situation once I quit, in that I'll have to figure out how I'm going to cover for new resource deficits that are no longer being filled by my company.
jacob wrote: ↑Thu Dec 26, 2019 3:43 pm
Add: That class-moat of "keeping up appearances" among other things (social relations) is similar to what is preventing me from going full-on Suelo or Mark Boyle.
This also drives a lot of my eating out expenses. I feel awkward and out of place going to restaurant and not getting anything. This has been getting better due to exposure to saying no to friends and family and also due to changing up where I meet with people.
@all
My intention in asking about other journals was more about seeing how other people failed. I feel as though I have a decent intellectual understanding of many things related to ERE, but ultimately when I try to put things into practice I still fail due to my personal failings (or now as I learn more about systems maybe due to the negative effects of work. eg Stress due to work leads to me overeating or buying stuff on Amazon that I don't need which leads to higher expenses which stresses me out, etc. And managing stress to maintain solid performance at work is the main reason I prefer to live alone.)
My plan is to rearrange my current design to have fewer negative aspects (eg getting fit, eating healthy, cooking, working less), aligning the remaining negatives with my strengths (at this time, I'm referring to using my excess cash flow to pay for an expensive housing situation only) to compensate, start learning skills with low ROI in the money dimension, but high ROI in the Renaissance ideal dimension, and make a 2 - 3 year exit plan that feels safe enough for me to move to an area where there are overall fewer negatives I need to compensate for while also quitting my job.
edit: typos