Comments on: Financial Success and Sacrifice

By: Bill in NC

Bill in NC — Mon, 26 Jan 2009 17:13:26 +0000

Housing and transportation are generally the biggest expenses for a household.

And in the long-term have much more impact than any latte.

So if you want to build wealth like “The Millionaire Next Door”:

1. live in a modest home (no 5000 sqft. McMansion)

2. and drive inexpensive, preferably used vehicles.

You can always rent the vehicle of your dreams for the class reunion!

By: Aggie Janicot

Aggie Janicot — Mon, 26 Jan 2009 04:26:23 +0000

Trent-
If you ever get a chance to read any sociology, you should try a book called “Social Problems for the 21st Century” by J. John Palen, PhD.

Sociology was a wake up call for me. It had always been on the tip of my tongue how we all live in a “social construct” and some of us bought into it more than others. When I was able to see that it’s not “sacrifice” but “waking up to reality”, things made a lot more since.

We all buy goods and put value on them. Often that value isn’t real dollar value, but social pressure and construct. People *believe* Starbucks is better coffee.. but what really makes it any better than the 5 cents worth of hot tea I have in a reusable travel mug? It’s perception. It speaks of social class and prestige.

Often when we get a little older, mature a little more, get some kids… we stop caring so much about impressing others and flaunting our social class. It’s not sacrificing frills.. it’s growing up and accepting who you are, not about what you own. You quit buying into the construct and really start living.

Aggie

By: Mario

Mario — Sun, 25 Jan 2009 12:13:23 +0000

Also it has always been – Money makes the world go round – it is like that! I think due to the financial crisis competition became stronger!

Regards,
Mario

By: ZP

ZP — Sun, 25 Jan 2009 10:09:26 +0000

Being frugal is a great thing but I see that your focus is mainly on cutting expenses. Why don’t you think more about increasing streams of income? I guess it’s more inspiring. Anyway, thanks for your work.

By: CathyG

CathyG — Sun, 25 Jan 2009 04:25:09 +0000

I know it feels good that my family is now in a position not to have to worry every day about money, but it is starting to feel like people who made short-sighted decisions are getting rewarded (handouts, bailouts, college grant money, forgiveness refinancing, etc) while those of us who made wise decisions and sacrifices are getting dragged down(how’s your 401k lately?).

It’s getting hard to keep that green-eyed monster at bay, and it’s hard not to just give up and join the spend-it-now hoards.

By: Betsy

Betsy — Sun, 25 Jan 2009 02:47:31 +0000

Trent,
If all of us in America could make this mental switch, we would be on the way to solving our financial, climate-change and energy crises.
Thanks for your practical view towards large issues.

By: Steve

Steve — Sat, 24 Jan 2009 23:05:37 +0000

There’s been several blogs that I’ve been following that talk about frugality. Too me, be frugal on the daily mundane walk of life so that you can enjoy (and even be someone excessive) on the special non-daily things. I’ve been enjoying one such site that seems very minimal in scope and just posts 1-2 daily “deals” that are in step with daily living- frugally= http://www.CrazyBargain.com I enjoy buying day-to-day stuff on the cheaps so that I can splurge on the unique and seldomly purchased things.

By: Gena

Gena — Sat, 24 Jan 2009 21:18:31 +0000

Just wanted to let you know I walked into my local Barnes and Noble yesterday and your book had its own table as soon as I walked in the door!

By: Isabelle

Isabelle — Sat, 24 Jan 2009 19:58:53 +0000

The idea of giving up things is a fallacy. Yes, we can ‘buy’ many different consumer items with ‘future money’, by using credit cards and loans – but when we stop doing this and live within our means we are not ‘giving up’anything.

The feeling of wealth and abundance we get when we use credit is completely false. The day MUST come when we have to pay. To do this we have to go from living above our means to living below our means.

By: Daphne

Daphne — Sat, 24 Jan 2009 19:07:52 +0000

I’m a reformed (in process!) consumer, and am constantly surprised by the simple pleasure I get in choosing to NOT spend money. Last week, a young friend and I agreed to read a book together and discuss it. I was sure I had the book in my voluminous (no pun intended) home library, but after digging through all the shelves, came up empty handed. I decided to borrow the book from my local public library, but it’s not there either. I have an unspent gift card from Christmas, and had just about decided to try to buy the book in a local bookstore with the gift card. Then it dawned on me. . .I probably have another friend who owns that book. If I can borrow their copy, and they would like to borrow another book from me, we both get something we want without spending a dime, and it puts me in touch with another person, instead of with a Big Box store or the internet for a purchase. All around, this is so much better than my old way of doing things. Six months ago, I wouldn’t have thought twice about placing an order on the internet for that book. . .along with 2 or 3 others, so I could take advantage of free shipping.

By: Fred

Fred — Sat, 24 Jan 2009 18:32:56 +0000

.
The source of Capital formation is in the postponement of immediate consumption in the hope a of future greater satisfaction…

Capital can buy assets that will put money into your pocket… So, what is your plan? Do you have a spending plan or an investment plan?

Sacrifice!? Not that I don’t hear the whiners, but I am still to see real misery in America where everyone has access to potable water, education and medical treatment.

By: tammy

tammy — Sat, 24 Jan 2009 15:09:15 +0000

Dr Wayne Dyer says, “When you change the way you look at things, the things you look at change.”
Perception is reality- perceiving “sacrifice” as trading is a wonderful concept!

By: Goal Hunter

Goal Hunter — Sat, 24 Jan 2009 14:23:11 +0000

I like it. There’s no need to judge one as worse or better than the other, it’s just about which path takes you where you want to go.

oneofnine: I think the book is called “The Millionaire Next Door” by Thomas Stanley.

By: Meggles

Meggles — Sat, 24 Jan 2009 14:15:51 +0000

Trent, I really like how you substituted the word ’sacrifice’ for ‘trade’. When giving up enjoyable, but wasteful habits, it feels like a sacrifice in the short term. But in the long term, one trades short-term enjoyment for long-term security and stability. My own area of temptation is cute outfits for our daughter and things for the house. I’ve gotten better, but still working on the siren call of those two things.

By: Dawn

Dawn — Sat, 24 Jan 2009 13:04:05 +0000

But what to you trade when you don’t have anything to trade with? I am a single parent. I brwon bag lunch every day, take coffee from home, haven’t seen a movie in years, don’t eat out, live in MN and keep the heat set at 62. I live very simply and frugally. My one luxury is the internet. I purchase groceries from a list and don’t deviate, clip coupons, drive a 7 year old car – try not to make any unnecessary trips.
I don’t have much to trade. Sometimes I think its not much of a life, but its what I can barely afford. I’m not trying to whine, I am at least employed, have a roof, food, etc. Probably better off than a lot of people. I just think sometimes its not as easy to say “make a trade off” when there is very little to trade in the first place.

By: Charles Cohn

Charles Cohn — Sat, 24 Jan 2009 07:28:00 +0000

About the most important decision a person needs to make in their life is whether or not to have children. It should be a considered decision, not just letting it happen. I decided in my early teens that I never wanted to have children, and that decision has served me well up through the age of 77 where I am now.

By: Steve

Steve — Sat, 24 Jan 2009 06:40:57 +0000

Nice post Trent! I just wrote a quick blog about the same topic, but from a different approach. I like your’s better ;)

By: oneofnine

oneofnine — Sat, 24 Jan 2009 05:21:25 +0000

Isn’t this similar to the book where the guys interview hundreds of millionares in America and discover that most of them live frugally and invest heavily in the future? The book (I’m sure you know what I’m talking about but the title escapes me right this minute) pinpoints the difference between being wealthy and being affluent. The affluent may have high incomes but still live beyond their means and often carry large amounts of debt. The wealthy, on the other hand, live well BELOW their means and could comfortably maintain their lifestyle with their investment and savings for years to come if their income suddenly disappeared.

It’s not a hard choice for me! I’d certainly rather be wealthy than affluent. Which is one of the reasons why both my spouse and I have our own businesses and expect to “retire” in our 40’s. It’s not a sacrifice; its a pleasure knowing that our future is secure because of the decisions we made yesterday and today. What could be better?

Great post!

By: Ken

Ken — Sat, 24 Jan 2009 04:06:52 +0000

You hit the nail on the head when you said you switched from short-term thinking to long term thinking. If only more families would begin to think this way. It’s what I call here and now thinking. No thought of tomorrow at all. I’m 41 and wished I had began saving much earlier than I did. People today do not like sacrifice. They don’t want to wait any longer than 1/2 a second. Supporting their now robs them of their future.
Great post!

By: Griffin

Griffin — Sat, 24 Jan 2009 03:16:32 +0000

Sacrifice is giving up something good, for something better.

That is the big rule that I live by :-) Everything is a trade-off.

I started today with $23.

Do I want hair dye tonight, or do I want to e-file my taxes and get my return back earlier? They are both wants technically, so I could obviously choose “neither.” But taxes are more important, so I chose to e-file so I can add the small refund to my budget for February.

$23-10=13.

Next, do I want hair dye or flax bread for the week? I want to dye my hair, but flax bread is a need. So Flax bread it is!

$13-5=8

And with $8 I can get a lesser-expensive hair dye if I don’t have another need to spend it on right now. :-)