sabrinamari | Today, good and bad

You're viewing

sabrinamari's journal
Create a Dreamwidth Account Learn More

Reload page in style: site light

Good:

Deposited rest of house payment
Dropped off last house sale related form
Ran a meeting in a chaotic environment
Discovered I probably won't have to run that meeting again, freeing me up to write on Tuesdays
Ordered replacement activity monitor
Ate well and started tracking food
Got small cheap rugs and candles for space
Bought groceries

Bad:

Missed Michael and Trent ALOT
Exhausted when I got home
Still need to type SCOPE notes and start Chapter 2 revisions

Miscellaneous:

Read "The Millionaire Next Door". Just check it out of the library and read it, or listen to the audiobook. Trust me.

If you listen to the audiobook, you can retrain your brain while driving.

It is a SERIOUS eye opener.

Flat | Top-Level Comments Only

From:

disownedheidi.livejournal.com

My mom, a financial planner, got it for me. Some things are just unrealistic, like buying a house with no mortgage. Unless you want your whole family to live in a studio apartment, that just isn't possible in many parts of the country.

The basic premise as I read it was "Never spend any money on anything, ever, and then you'll be rich!" But what is the point of being rich if you never spend any money?

That said, yes we do save about 1/4 of our income, both for a down payment on a future home and for retirement. I do agree one should live within ones means... my definition is a bit broader. I don't mind taking out loans for education and property. We don't have a credit card though, we use debit so if we don't have the money we can't buy it.

He also doesn't deal with the fact that in many cities, home choices are between a house in a dangerous neighborhood where people are shooting each other, or a McMansion in the suburbs. I agree that a medium house in a safe neighborhood is ideal, but less and less of those are available. The housing market is WAY inflated, at least in all the places I've looked at (and we can't move somewhere cheaper if we don't have a job there).

I do agree that it is good to live somewhat frugally, however.

From:

spiffnolee.livejournal.com

But what is the point of being rich if you never spend any money?

I definitely see what you see in the book, but I got different messages, too:
1) Most millionaires don't live like they're rich, partly because
2) a million bucks ain't what it used to be, but still
3) live below your means. As with Rich Dad, Poor Dad and Dave Ramsey's stuff, get a positive cash flow, so you make more than you spend (or spend less than you make), and over the long term you'll accumulate wealth. Best is to become accustomed to your standard of living, then keep it steady while you increase your income.

From:

sabrinamari.livejournal.com

These messages, along with the parenting and estate planning advice, were what caught my attention the most.

From:

sabrinamari.livejournal.com

What I loved the most about this book was the chapter on parenting, which titled "economic outpatient care".

The good faith strategies that many of the folks in his book used---some of which *I* had been planning to use---resulted in weakening the children who needed more help to become independent and strengthening the children who pissed their parents off.

What these researchers found is that new parenting strategies were needed, strategies without unintended consequences.

For me, this was a tremendous eye opener.

I do agree that many urban areas on the east and west coasts have tremendously polarized options: really low cost and scary, or really expensive and scary---for different reasons.

In this environment, it is much harder to make modest decisions in terms of housing. Frankly, I think the east coast is waaaaay overinflated in terms of housing costs, even now. And, in fact, NJ has been experiencing a steady outflow of the middle class for several years now, as people in the northern half of the state find that it's just too expensive to live here. I'm sure other highly urbanized areas have similar phenomena.

Bloomberg radio did a show on this a couple of years ago, and the researchers interviewed explained that over time, if the trend did not shift, NJ would eventually be populated by people so poor they could not afford to leave and people so rich that they had a wide variety of tax shelter options, and so paid a low proportion of taxes. The results, they feared, would be a state unable to operate because it had virtually no middle class tax base.

For those stuck in this predicament. I think the thing to do is shop carefully and long for a really good deal on a house, and then refuse to "keep up with the Joneses".

That's the strategy I would use today, if I were in the market for a house.

From:

disownedheidi.livejournal.com

I agree that the housing is still overinflated, and get really pissed off when politicians talk about keeping housing prices stable. I think they need to drop quite a bit to be reasonable in any of the areas J has gotten a job offer.

I also did get the point about "keeping up with the Joneses". I do sometimes look around at people buying expensive stuff and wonder who the hell can afford it... I mean, we are doing fine by most indicators but can't afford to spend $300 on ipods or to get cable and buy a TV or buy new cars or things like that. Then I remember a) we are saving quite a bit and b) most people buy things on credit.

I can't imagine buying something on credit that isn't a long-term investment. So in that regards, yes, I totally understand the guy.

On the other hand, sometimes wanting to spend less can have a broader impact... such as going to places like Walmart which has a very negative impact on the economy. In the short term one saves a couple of bucks, but in the long term moving all the manufacturing overseas isn't good for any of us (see trashed economy).

From:

sabrinamari.livejournal.com

First, the fact that you are saving makes you different in a good way, than most Americans...at least until this last recession.

I agree completely that buying on credit for something that will not appreciate over time is just a crazy strategy.

It's true that cheap does not necessarily equal better. Buying at places that hurt the world or national economy is destructive in the long wrong, and spending less on something that will not last/is not what you need is just as wasteful as spending too much on a frivolous item.

Maybe it's really about balance: finding a harmonious middle path.