@Zizou wrote:
Well, no we are not broke but we live within our means.
The goal is to travel as much as possible.
And yes we have 401k's.
Not the discussion here but we went against Roth or other possibilities.
We will stick with our 401K's.
Thanks
I'm glad to hear about it when people live within their means. I like the 75-10-15 rule.
No more than 75% of your income should go to expenses, at least 10% should be saved, and at least 15% should be invested.
When you live as close to the edge as many people do, you are already spending 100% of your income on your daily expenses and possibly taking out loans as well. It's a bad way to live because you end up living on less than 75% of your income anyway, but the rest just goes to debt service for things you bought a long time ago, most of which is interest which doesn't even help you.
The bankruptcy sucked all the pride and arrogance right out of me. I no longer care what I look like to other people. We tend to gravitate, not on a conscious level, to what's called Social Comparison.
Simply put, Social Comparison is where we use those around us as a benchmark to define what success means to us.
If you're a broke college kid and everyone around you is broke too, it becomes acceptable in your mind to not be doing very well financially at that point in your life. But if you're making $100,000 a year and everyone else in your neighborhood is a millionaire, then you won't want to spend $20,000 on a Toyota when they're driving a Tesla Cybertruck, so you end up spending the $20,000 that could have bought a Toyota outright, on a down payment on a Cybertruck, and then you owe another $140,000 where that came from, which means monthly payments, and an opportunity cost of not investing the money, so you can look ridiculous and impress the neighbors.
Then people wonder why it never mattered to them that they drove a beater before they moved into that neighborhood.
Never compare yourself to others. Don't allow Social Comparison to creep in.
The reason I love 75/10/15...
Almost anyone can do this, even with just over $50,000 in income living in the 4th richest county in America!
When most people say there's nothing to save and they can't do it and that's impossible, it means they don't want to sit down and figure out, using a spreadsheet and zero base budgeting (start from zero, justify every expense) how they're going to make that happen so they can win.
If it was me and I actually didn't need the money, I'd keep it invested.
You said earlier "How often does even $2,000 come up in an emergency?" If you're smart and frugal, it usually doesn't.
Some people consider the alternator on their car going out ($180 if you DIY like me, $700 or so at a garage) an emergency. I don't. It kind of sucks that I have to take it out of an interest bearing account, but these things happen.
The alternator may blow up but it will be an inconvenience, not an emergency that requires a bank loan. It sounds like you guys get that, which is good. Not everyone does.
There is no replacement for a cash cushion. When I had a car accident in 2021, I didn't even report it to my insurance company. They charge you about 300% of what any claim actually cost them. They make sure that they get it by putting it in CLUE and making sure you might as well just pay them higher premiums for a few years, because you'll pay them to someone. When I paid cash to fix the car, and paid cash to hire a lawyer to beat the traffic ticket that came from it, thus discouraging a lawsuit from the other party (who was going to wait and try to use a guilty plea from mailing the ticket with some money to bootstrap a lawsuit), I saved myself so much in further losses by spending $1,000 I had.
The other people never bothered to file a claim against my insurance. I don't know why. I don't care why. The important thing is I got incredibly lucky and they had two years to do something about that and they didn't.
