Doing the "Big Things" Right

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jolmscheid
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Doing the "Big Things" Right

Post by jolmscheid »

I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
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Re: Doing the "Big Things" Right

Post by arcticpineapplecorp. »

It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
CletusCaddy
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Re: Doing the "Big Things" Right

Post by CletusCaddy »

You missed the Biggest Thing - maximize your income.
Living Free
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Re: Doing the "Big Things" Right

Post by Living Free »

Education expenses both for oneself and offspring can be another very big expense. Imagine paying for one’s own undergrad and grad school at an expensive private then k-12 private school and private undergrad for 2 kids. Full sticker could easily exceed $1mil and approach $1.5mil. So could easily dwarf the others.
MathWizard
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Re: Doing the "Big Things" Right

Post by MathWizard »

Choosing a spouse with compatible goals.

Bring lunch to work everyday.
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FrugalInvestor
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Re: Doing the "Big Things" Right

Post by FrugalInvestor »

Don't buy into the "subscription" model and never approve auto-renewals to credit cards.

I know this isn't a big thing but even the little things add up over time.
Last edited by FrugalInvestor on Fri Aug 19, 2022 9:50 pm, edited 1 time in total.
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Normchad
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Re: Doing the "Big Things" Right

Post by Normchad »

MathWizard wrote: Fri Aug 19, 2022 9:11 pm Choosing a spouse with compatible goals.
I actually believe this is the most important big thing to get right.
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Re: Doing the "Big Things" Right

Post by runner3081 »

FrugalInvestor wrote: Fri Aug 19, 2022 9:16 pm Don't buy into the "subscription" model and never approve auto-renewals to credit cards.
Yes, yes, yes! We avoid the subscription model like the plague!

That even includes Amazon, Walmart+, Costco, streaming services, etc.

Only thing we subscribe to are cheap MVNO cell plans, AAA (insurance discount) and internet.
delamer
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Re: Doing the "Big Things" Right

Post by delamer »

Set an annual savings goal.

Spend only what’s left (after payroll and income taxes).
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anon_investor
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Re: Doing the "Big Things" Right

Post by anon_investor »

Living Free wrote: Fri Aug 19, 2022 9:06 pm Education expenses both for oneself and offspring can be another very big expense. Imagine paying for one’s own undergrad and grad school at an expensive private then k-12 private school and private undergrad for 2 kids. Full sticker could easily exceed $1mil and approach $1.5mil. So could easily dwarf the others.
Cheaper to move to a good school district in a state with good state universities and get free k-12 and in-state university tuition.
BernardShakey
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Re: Doing the "Big Things" Right

Post by BernardShakey »

jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education

Minimize the above costs to maximize your savings and you're well on your way to financial independence.

1. Maximize use of tax-advantaged retirement accounts, use Mega back door Roth, live where property & state income taxes are low
2. 15-year mortgage, pay cash for cars (which means driving a beater until you can afford better)
3. Term life insurance only, basic home & auto, health insurance via your work, self-insure instead of LTC if possible, skip warranties
4. Buy housing in the best school districts and go public schools all the way...K-12, undergrad, grad school, professional school, etc.
An important key to investing is having a well-calibrated sense of your future regret.
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Re: Doing the "Big Things" Right

Post by Outer Marker »

Take good care of your cars and drive them for 20 years.
Topic Author
jolmscheid
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Re: Doing the "Big Things" Right

Post by jolmscheid »

CletusCaddy wrote: Fri Aug 19, 2022 8:55 pm You missed the Biggest Thing - maximize your income.
Thanks, but it was listed as the last bullet point
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happysteward
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Re: Doing the "Big Things" Right

Post by happysteward »

My biggest expenses are…

#1….taxes*
#2…charitable giving, happy to be able to do this one
#3…investment expenses (fees on my retirement savings)**

* working hard on only paying what I have to
**working hard on it, right now I have a weighted average of 50 bp on $2,500,000.
Last edited by happysteward on Sat Aug 20, 2022 6:16 am, edited 2 times in total.
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woodside
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Re: Doing the "Big Things" Right

Post by woodside »

BernardShakey wrote: Fri Aug 19, 2022 10:51 pm
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education
Right on the top four big expenses, applicable to most Bogleheaders. However, for the 43% of households that pay zero tax, they probably spend a lot of money on the interest on credit cards or other loans (not mortgage though) and lottery tickets.
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racy
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Re: Doing the "Big Things" Right

Post by racy »

Marry a working girl.
Ivygirl
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Re: Doing the "Big Things" Right

Post by Ivygirl »

1. Avoid vices.
2. Avoid consumer debt.
3. Practice deferred gratification and keep your eyes on the prize.

Bonus #4 - Buy a new, reliable model economy car and drive that as long as you safely can. After about 10 years when you start to get tired of it, take it to the car wash and thoroughly detail it yourself, and get some new floor mats. You'll remember why you like it.
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Re: Doing the "Big Things" Right

Post by stoptothink »

Normchad wrote: Fri Aug 19, 2022 9:40 pm
MathWizard wrote: Fri Aug 19, 2022 9:11 pm Choosing a spouse with compatible goals.
I actually believe this is the most important big thing to get right.
:thumbsup Took me two chances to get this one correct. As maybe the most frugal poster on this board, I could make a VERY long post, but all my suggestions have been posted multiple times on this board over the past decade+.

My primary suggestion is really consider the difference between what is a "need" and what is a "want". The most significant way my family has been able to keep our expenses so low (and savings rate so high) is because many things that other families spend on regularly simply are not a part of our lives.
stoptothink
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Re: Doing the "Big Things" Right

Post by stoptothink »

woodside wrote: Sat Aug 20, 2022 6:12 am
BernardShakey wrote: Fri Aug 19, 2022 10:51 pm
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education
Right on the top four big expenses, applicable to most Bogleheaders. However, for the 43% of households that pay zero tax, they probably spend a lot of money on the interest on credit cards or other loans (not mortgage though) and lottery tickets.
It was actually a record 60.6% last year https://www.taxpolicycenter.org/model-e ... units-zero
ThankYouJack
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Re: Doing the "Big Things" Right

Post by ThankYouJack »

We travel / vacation a bunch so that's a big one for us. But we typically stay with family or friends (or split vacation properties with friends) so that saves us a lot and has been a more enjoyable experience.
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TomatoTomahto
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Re: Doing the "Big Things" Right

Post by TomatoTomahto »

stoptothink wrote: Sat Aug 20, 2022 6:41 am
woodside wrote: Sat Aug 20, 2022 6:12 am
BernardShakey wrote: Fri Aug 19, 2022 10:51 pm
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education
Right on the top four big expenses, applicable to most Bogleheaders. However, for the 43% of households that pay zero tax, they probably spend a lot of money on the interest on credit cards or other loans (not mortgage though) and lottery tickets.
It was actually a record 60.6% last year https://www.taxpolicycenter.org/model-e ... units-zero
You should specify that you are discussing income taxes. Almost everyone pays taxes of one flavor or another.
I get the FI part but not the RE part of FIRE.
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Re: Doing the "Big Things" Right

Post by Parkinglotracer »

Save what you want to save first thru an auto allotment from your paycheck. Then spend the rest as you see fit. Invest in the big three funds via BH philosophy. Don’t allow life style creep to stop you from your goals. Spend money on education and training to increase your income.

Have fun - you only live once and we are the lucky ones.
punkinhead
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Re: Doing the "Big Things" Right

Post by punkinhead »

Don't discount the importance of the little things. When I first graduated and got married 30+ years ago I read that every now and then you should track every penny you spend for a couple weeks. Even a candy bar gets noted. I did it a few times and was shocked by how impulse buys in the $1-$20 range added up to a significant part of my discretionary spending. Those same impulse buys are probably in the $50 range these days. Eating a $15 lunch 5 days a week is $3900/year.
stoptothink
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Re: Doing the "Big Things" Right

Post by stoptothink »

TomatoTomahto wrote: Sat Aug 20, 2022 7:00 am
stoptothink wrote: Sat Aug 20, 2022 6:41 am
woodside wrote: Sat Aug 20, 2022 6:12 am
BernardShakey wrote: Fri Aug 19, 2022 10:51 pm
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education
Right on the top four big expenses, applicable to most Bogleheaders. However, for the 43% of households that pay zero tax, they probably spend a lot of money on the interest on credit cards or other loans (not mortgage though) and lottery tickets.
It was actually a record 60.6% last year https://www.taxpolicycenter.org/model-e ... units-zero
You should specify that you are discussing income taxes. Almost everyone pays taxes of one flavor or another.
I thought that was assumed...but you know what they say about "assumptions".

I listened to my sister - who pretty recently increased her income from almost nothing, for the first two decades of her adult life, to ~$150k/yr after finishing a coding bootcamp and getting a Megacorp software development job - go off on a rant about income taxes last weekend at family dinner. Took all my strength to bite my tongue.
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9-5 Suited
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Re: Doing the "Big Things" Right

Post by 9-5 Suited »

One’s approach to saving money is extremely personal, and in our case we just opt for setting a savings rate goal and not caring very much about hyper-optimizing saving opportunities. I feel generally confident we aren’t getting ripped off anywhere, so it’s way more liberating to just stop caring very much. If you are a big picture “get the big things right” kind of person, you may find it similarly liberating.

Here’s an assymetry I’ve noticed: imagine someone has a 30% tax rate. If they told you they figured out a way to increase annual income by $1,000 most people would just shrug. If they told you they found a way to cut $700 out of their spending, lots of people would follow their blog. There’s a giant focus on the value of saving money of purchases, and my hypothesis is that it’s easy and readily available so people focus a lot on that. (Of course this is a comment about people with means like most Bogleheads, not people living in poverty who have no choice.)

The comments above about proudly avoiding all subscription services just do not resonate with me. We are achieving our savings goals so I have zero incentive to care that I have a Costco membership or multiple streaming services. That feels like the opposite of seeing the big picture.
PersonalFinanceJam
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Re: Doing the "Big Things" Right

Post by PersonalFinanceJam »

Very much agree with some of the posters above. Finding ways to increase your income, finding the right partner, setting a relatively high savings rate and the rest just falls into place. Assuming you are not living your life on credit after that, I think you just naturally optimize for what brings you the most enjoyment.
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Riprap
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Re: Doing the "Big Things" Right

Post by Riprap »

9-5 Suited wrote: Sat Aug 20, 2022 7:32 amThe comments above about proudly avoiding all subscription services just do not resonate with me.
I have the same sentiments. I am certain that just on shipping alone at Amazon we recoup the Prime membership fee many times over.

I personally don't like shopping at Costco, but my spouse loves it. It's a small compromise and I do like a lot of the Costco products, I just don't like crowds.
Last edited by Riprap on Sat Aug 20, 2022 8:32 am, edited 1 time in total.
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Re: Doing the "Big Things" Right

Post by nisiprius »

FrugalInvestor wrote: Fri Aug 19, 2022 9:16 pm Don't buy into the "subscription" model and never approve auto-renewals to credit cards.
Complicated. I believe strongly that it is not the splurges that get you, it's the monthly payments.

From the other side, they know perfectly well that it is far better for them to hook you into recurring expenses, and they are succeeding in making that the only practical option.

Unfortunately, "they" are winning. The late Michael S. Hart, founder of Project Gutenberg, was spot on in his comments about how we were gradually being nudged from an ownership to a rental society.

There are very few places any more offering "auto-billed, but you must manually click a button to approve each payment."

It's a subtlety, but, for example, it is no longer possible to buy an .mp3 music track from Amazon without first going through a screen offering you the option to play it immediately if you have their subscription music service, and only after you locate and press an option button does the screen reload with .mp3 purchase options. Amazon is not quite as intrusive but they always show you that you could read the book for free if you had their subscription service, and sometimes I believe it takes another click to find the purchase price.

When we have planned two-month camping road trips, it is, frankly, a great convenience to know that the gas and electric bills are going to be paid automatically.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
PeninsulaPerson
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Re: Doing the "Big Things" Right

Post by PeninsulaPerson »

punkinhead wrote: Sat Aug 20, 2022 7:05 am
Don't discount the importance of the little things.
+1000 because there are so many "little things"!


jolmscheid wrote: Fri Aug 19, 2022 7:55 pm
I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

Also figure out what your own personal weak points and blind spots are and mitigate them as much as possible.

Your "mindset" there be a place to start. What did Thomas Jefferson say about vigilance?! No need to go crazy with the thinking about smaller things but they are something to keep an eye on!

The ones you mentioned are good and also - some of them - one-offs or minimal savings. When a Saturday lunch for two (splitting an appetizer and a burger with two cocktails, two sodas plus tip) is $100, that's where the small things start adding up fast! What stoptothink said above about needs & wants!


As to "doing the big things right," as so many have said here - if you marry, be sure you and your future spouse are sensible about money and likely to remain reliably sensible when the changes (children, elderly parents) come!

Not cheap! Not cruel! Sensible!
(One example - a neighbor was fine with money until the grandchildren came. They then ran through $300,000 of home equity buying the grandkids stuff! Yikes!)
Last edited by PeninsulaPerson on Sat Aug 20, 2022 9:03 am, edited 4 times in total.
gmc4h232
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Re: Doing the "Big Things" Right

Post by gmc4h232 »

stoptothink wrote: Sat Aug 20, 2022 6:40 am As maybe the most frugal poster on this board
Them's fightin words around here!
rich126
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Re: Doing the "Big Things" Right

Post by rich126 »

This is one of the things where some people will obsess over every thing. Like a restaurant owner who is so worried about customers taking an extra condiment or napkin he overlooks the number of customers and employees he loses over such nit picks.

I've come to a few thoughts. One is that money buys you freedom or possessions (unless you are so wealthy you can do whatever you want). I prefer having my freedom. Instead of spending another $20K-50K on a car, I'd rather have that in the bank so I can take vacations when I want, or have a nice meal out, etc. I kind of view it as one big expense (expensive car in this case) means you lose out on a lot of other things you might want to do.

An older relative once mentioned that he realized most of his coworkers seemed to be living paycheck to paycheck and he couldn't figure out why since they were making good money. Then he realized they were all house poor. They had to extend themselves for that expensive house.

While most here won't admit to it, it is obvious in many of the posts that many people here are caught up in the status of things and need that expensive appliance, car, clothing item, etc.

I think the title here maybe should be "Avoiding the big mistakes" instead of doing the big things right. You can waste a lot of nice meals before it ever costs you what that "must have" car will cost you. I do the same thing with jobs and stocks. Avoid the big speculative disasters.
----------------------------- | If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
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Re: Doing the "Big Things" Right

Post by carolinaman »

CletusCaddy wrote: Fri Aug 19, 2022 8:55 pm You missed the Biggest Thing - maximize your income.
+1. Great!
carolinaman
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Re: Doing the "Big Things" Right

Post by carolinaman »

A few suggestions not mentioned:
- Only go to stores to buy specific things. Do not go to browse around.
- Sleep on any major purchase like a new car, house, etc. Never buy impulsively.
- Research major purchases. There is a wealth of info on Internet to help us to know what and where to buy, what features are important and which are frivolous.
- Periodically review smaller ongoing expenses to see which provide value and which can be canceled. I have accumulated a bunch of subscriptions which I can cancel and save $1k+ per year. Not a big deal, but I will never miss them. There are more small expenditures that I can cut without sacrificing. Contrary to the post title, these small things can add up and often do not provide much value or enjoyment.
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AnnetteLouisan
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Re: Doing the "Big Things" Right

Post by AnnetteLouisan »

For me - and everyone’s different - the big things have been:

- get good credentials
- stay employed FT at a good salary
- live below means
- try hard to stay healthy - invest in health
- receive interest rather than paying it
- be alert to new opportunities
- think long term
- avoid self destructive behavior
Last edited by AnnetteLouisan on Sat Aug 20, 2022 9:34 am, edited 1 time in total.
Ed 2
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Re: Doing the "Big Things" Right

Post by Ed 2 »

CletusCaddy wrote: Fri Aug 19, 2022 8:55 pm You missed the Biggest Thing - maximize your income.
This goal for certain age. One’s you rich your FI number hedonic treadmill no longer needed.
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Re: Doing the "Big Things" Right

Post by Ed 2 »

AnnetteLouisan wrote: Sat Aug 20, 2022 9:32 am For me - and everyone’s different - the big things have been:


- try hard to stay healthy - invest in health


- think long term
+1. This two things are most important ones and yet less mentioned among us , unfortunately.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
delamer
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Re: Doing the "Big Things" Right

Post by delamer »

BernardShakey wrote: Fri Aug 19, 2022 10:51 pm
jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
Your big four over your lifetime are likely to be:

1. Taxes
2. Interest
3. Insurance
4. Education

Minimize the above costs to maximize your savings and you're well on your way to financial independence.

1. Maximize use of tax-advantaged retirement accounts, use Mega back door Roth, live where property & state income taxes are low
2. 15-year mortgage, pay cash for cars (which means driving a beater until you can afford better)
3. Term life insurance only, basic home & auto, health insurance via your work, self-insure instead of LTC if possible, skip warranties
4. Buy housing in the best school districts and go public schools all the way...K-12, undergrad, grad school, professional school, etc.
I have to disagree with the big four above. Even if you treat mortgage interest as a separate category, purchasing and maintaining a home should be In the top three.

I do agree about the 15 (or even 10) year mortgage, as soon as practical.

A related caution — don’t use your home equity to finance other aspects of your life.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Target2019
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Re: Doing the "Big Things" Right

Post by Target2019 »

Invest in your human capital (you, the biggest of things) so that you will earn significant increases as you move between jobs or postions throughout your working career.
Normchad
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Re: Doing the "Big Things" Right

Post by Normchad »

Target2019 wrote: Sat Aug 20, 2022 10:19 am Invest in your human capital (you, the biggest of things) so that you will earn significant increases as you move between jobs or postions throughout your working career.
Yep. Too many people overlook this one.
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Re: Doing the "Big Things" Right

Post by kada »

I think rather than "big things" I think of it as "big mindset", specifically living on at least <70% of your income. The big things we spend on now may not be the big things we spend on in the far future, however living on less than you earn can be adapted and customized to each person.
CletusCaddy
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Re: Doing the "Big Things" Right

Post by CletusCaddy »

kada wrote: Sat Aug 20, 2022 10:51 am I think rather than "big things" I think of it as "big mindset", specifically living on at least <70% of your income. The big things we spend on now may not be the big things we spend on in the far future, however living on less than you earn can be adapted and customized to each person.
I agree, and the way that I would express it is, "after income taxes, spend half, save half"
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Re: Doing the "Big Things" Right

Post by Ron Ronnerson »

jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
I think it's great you're thinking about this stuff. Here are some "saving hacks” (I like your term, by the way) that we've used:

Property taxes – we live in California and stay put so our property taxes barely change year-to-year (we paid $9k/year in 2010 on a home valued at $500k and now pay $10k/year on a home valued at $1.2m). If we move within the state after age 55 (which is 7 years away), we can keep our property tax base.

Sales Taxes – We direct almost all of our spending toward items that don’t have a sales tax. For us, the categories include: housing, groceries, insurance, utilities, services, travel, education, and used items.

Income Taxes – We have figured out how to keep income taxes relatively low. This is largely by utilizing retirement accounts in our case. We paid no California income tax last year and had negative federal income tax liability due to refundable credits.

Education – My wife and I both went to in-state public universities. My tuition was covered by an academic scholarship, I worked a part-time job to pay for books and things, and lived at home with my mom for the first couple of years of college and with roommates later on. My wife worked throughout college. We graduated with no college debt (though this was a while back when college expenses were considerably lower than they are today).

Handyman – a good friend does our repairs in exchange for lunch

Cell Phones – use an MVNO (we pay $20/month per line)

Electric Bill – live in a moderate climate and utilize house fans and windows

TV/Internet – sign up for specials and check for promotions regularly. We have Hulu for $1/month, for example.

Health Insurance – use the ACA. We pay $0/month in premiums for a family of three.

Auto/Home Insurance – call annually to check on rates and switch when it makes sense to do so. We switched this year. We also switched last year.

Cars – drive inexpensive cars for a long time. We own two Corollas that we plan to drive for around 15 years. I drove my last car for 15 years as well.

Life Insurance – My wife and I both have term life insurance at super-preferred rates. It literally pays (30 years’ worth of premiums in our case) to get into the best shape of your life before signing up for life insurance that require medical exams.

Gas – Drive a fuel-efficient car and don’t use the car all that much. Over the years, we’ve worked from home, car-pooled, and worked a schedule that didn’t require as many trips to the workplace. Use fuel discounts associated with grocery stores (we often save a $1/gallon).

Child care – all grandparents live within a few minutes of us and my sister and her family live right next door to us. Family takes care of our one kid when we need help in this department.

Pets – one house cat. The cost is just a few bucks a month for some food and litter.

Vacations – We churn credit cards for points and miles. The bonuses can be lucrative.

Restaurants – we feed a family with a couple of Subway sandwiches for around $15. If we’re feeling frugal, a medium three-topping pizza at a nearby Domino’s is $8 (pick up required and every sixth pizza is free if you earn points using the app). McDonald’s will often have specials using the app too. We can get two sandwiches for around $5-$6. Costco hot dog is $1.50.

Gadgets – Use things until they get old or frustrating. My wife and I each used our last cell phone for 5 years, until they weren't working well anymore. A couple of years ago, I bought a 58-inch Samsung TV for $300 because the next year’s model was just coming out. The new model was pretty much the same but cost three times as much because it was the “latest.” Deals are often there to be had and people can usually put off replacing things for at least a little while longer.

Clothing/shoes – Use these items until they can’t be used anymore. Many of the clothes in my closet are decades old but still in decent condition. Don’t judge me harshly for not being the most fashionable (at least there is a bit less waste produced in the world).

Housing – Go big or go home (pun intended). We live in a relatively big (4-bedroom/4-bathroom) home for our small family of three people and one cat in a VHCOL area on a fairly moderate income. By directing our spending toward the house, our money is going into an appreciating asset as opposed to depreciating assets.

We’ve intentionally chosen to become what some would label as house-poor (our lifestyle feels very comfortable to us and we also have a pretty high savings rate). Our mortgage will take over 40 years to pay off due to multiple refinances and restarting the 30-year term. After 12 years of payments, we owe pretty much the same as we did when we purchased the home due to taking equity out of the home. The mortgage amount is for 4.5 times our income. The current loan is at 2.375%. Most of the equity taken out of the home is in I Bonds, currently paying 9.62%.

Rules can be bent sometimes. Our net worth has gone up from $80k in 2010 (when we bought our home and were 35 years old) to $1.6m today. Our retirement expenses should be fully covered by a pension.
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FrugalInvestor
Posts: 6214
Joined: Thu Nov 06, 2008 11:20 pm

Re: Doing the "Big Things" Right

Post by FrugalInvestor »

9-5 Suited wrote: Sat Aug 20, 2022 7:32 am One’s approach to saving money is extremely personal, and in our case we just opt for setting a savings rate goal and not caring very much about hyper-optimizing saving opportunities. I feel generally confident we aren’t getting ripped off anywhere, so it’s way more liberating to just stop caring very much. If you are a big picture “get the big things right” kind of person, you may find it similarly liberating.

Here’s an assymetry I’ve noticed: imagine someone has a 30% tax rate. If they told you they figured out a way to increase annual income by $1,000 most people would just shrug. If they told you they found a way to cut $700 out of their spending, lots of people would follow their blog. There’s a giant focus on the value of saving money of purchases, and my hypothesis is that it’s easy and readily available so people focus a lot on that. (Of course this is a comment about people with means like most Bogleheads, not people living in poverty who have no choice.)

The comments above about proudly avoiding all subscription services just do not resonate with me. We are achieving our savings goals so I have zero incentive to care that I have a Costco membership or multiple streaming services. That feels like the opposite of seeing the big picture.
I understand your perspective. Mine is a bit different and both of us likely have very valid reasons for our points of view.

I retired quite early and after doing so came to the conclusion that with more time on my hands the best way to "make" money (without working) was to not unnecessarily (or at least unthoughtfully) spend money. In other words, money that stayed in my investments continued to grow with little to no effort on my part, which is perfect as far as I'm concerned. :D

So as much for a hobby as anything I began paying more attention to not spending money unthoughtfully which went along well with my desire to simplifiy my life while prioritizing and still enjoying those things I truly value. I've found that paying attention to, prioritizing and ridding myself of small complications (many of which carry an associated cost) has made my life better as well as giving me the mental freedom to use money for things I find to be of greatest value.

Don't get me wrong, I still spend and spend quite well at times, but I think I'm more satisfied than I once was. Of course a part of that is undoubtably having the luxury of free time that is typically not as available when working.
Have a plan, stay the course and simplify. Then ignore the noise!
jebmke
Posts: 25474
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Doing the "Big Things" Right

Post by jebmke »

Our approach, years ago was to define savings first and then spending was residual. Then we didn't have to worry so much about what we spent on. Others sometimes prefer to define spending and then save the residual. Whatever work for you is the method you should use.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
BernardShakey
Posts: 1147
Joined: Tue Jun 25, 2019 10:52 pm

Re: Doing the "Big Things" Right

Post by BernardShakey »

Ron Ronnerson wrote: Sat Aug 20, 2022 12:02 pm
jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
Clothing/shoes – Use these items until they can’t be used anymore. Many of the clothes in my closet are decades old but still in decent condition. Don’t judge me harshly for not being the most fashionable (at least there is a bit less waste produced in the world).
You are an inspiration. Fellow Californian here, and I concur with the blessing we have with the 2% cap on property tax increases. With respect to your clothes and fashion, I'm right there with you. But as I like to tell my kids..."don't judge, I'm setting new fashion trends in the world every day!" :beer
Last edited by BernardShakey on Wed Aug 31, 2022 4:06 pm, edited 1 time in total.
An important key to investing is having a well-calibrated sense of your future regret.
stoptothink
Posts: 15368
Joined: Fri Dec 31, 2010 8:53 am

Re: Doing the "Big Things" Right

Post by stoptothink »

BernardShakey wrote: Sat Aug 20, 2022 11:29 pm
Ron Ronnerson wrote: Sat Aug 20, 2022 12:02 pm
jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
Clothing/shoes – Use these items until they can’t be used anymore. Many of the clothes in my closet are decades old but still in decent condition. Don’t judge me harshly for not being the most fashionable (at least there is a bit less waste produced in the world).
You are an inspiration. Fellow Californian here, and I concur with the blessing we have with the 2% cap on property tax increases. With respect to your clothes and fashion, I right there with you. But as I like to tell my kids..."don't judge, I'm setting new fashion trends in the world every day!" :beer
Ron has it dialed in. How he navigates tax situations and little money hacks to make the absolute most out of their income and maximize work/life balance is masterful. If my wife wasn't so intent on working, I'd be his Utah doppelganger.
Dottie57
Posts: 12379
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Doing the "Big Things" Right

Post by Dottie57 »

jebmke wrote: Sat Aug 20, 2022 12:15 pm Our approach, years ago was to define savings first and then spending was residual. Then we didn't have to worry so much about what we spent on. Others sometimes prefer to define spending and then save the residual. Whatever work for you is the method you should use.
I agree with defining savings. It worked for me during my work years. As a retiree, I have to pay more attention to how I spend.
Wannaretireearly
Posts: 4880
Joined: Wed Mar 31, 2010 4:39 pm

Re: Doing the "Big Things" Right

Post by Wannaretireearly »

Big things impacting us:
- only ever one mortgage.
- selling espp and rsu at the right time. Either reinvesting or spending on goodies
- travel and education being a focus for spending
- spending 40k on a nice car, instead of 60/70/80k
- automated investing. 40-50% auto savings thru 401k, MBR and ESPP.
- staying on this forum and almost continual education if you seek it! E.g. finally doing tax loss harvesting which I consider an advanced topic.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Ron Ronnerson
Posts: 3563
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Doing the "Big Things" Right

Post by Ron Ronnerson »

BernardShakey wrote: Sat Aug 20, 2022 11:29 pm
Ron Ronnerson wrote: Sat Aug 20, 2022 12:02 pm
jolmscheid wrote: Fri Aug 19, 2022 7:55 pm I have the mindset that if one can do the "big things" right for saving, then there is more flexibility with the smaller things....for example, if I can keep the "big 3" expenses under control (housing, transportation, food), then I don't need to think as much about the smaller things.

While I do feel I have housing, transportation, and food in line (always can do better of course), would love to hear others' saving hacks....here are what come to mind:

- Checking on rates annually for mortgage insurance, car insurance
- Buying generic
- Cutting cable
- Internet provider deals?
- "Lesser known" Mobile phone plans (Republic, mint, etc
- Increasing income to be able to save more
Clothing/shoes – Use these items until they can’t be used anymore. Many of the clothes in my closet are decades old but still in decent condition. Don’t judge me harshly for not being the most fashionable (at least there is a bit less waste produced in the world).
You are an inspiration. Fellow Californian here, and I concur with the blessing we have with the 2% cap on property tax increases. With respect to your clothes and fashion, I right there with you. But as I like to tell my kids..."don't judge, I'm setting new fashion trends in the world every day!" :beer
I like it. Yes, we're trendsetters! Thanks for the kind words and :beer
VanGar+Goyle
Posts: 603
Joined: Sat May 29, 2021 1:31 pm

Re: Doing the "Big Things" Right

Post by VanGar+Goyle »

gmc4h232 wrote: Sat Aug 20, 2022 8:56 am
stoptothink wrote: Sat Aug 20, 2022 6:40 am As maybe the most frugal poster on this board
Them's fightin words around here!
Last edited by VanGar+Goyle on Sun Aug 21, 2022 10:29 am, edited 1 time in total.
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