[mathgeek]

"At the same time, there is a depressing message for the rest of us: Maybe the fact that you would even consider retiring to a life of luxury at a young age is a sign you aren’t going to succeed at a high enough level to make that an option."

Now wait a second... didn't the author just finish talking about diminishing utility? This sounds like the mindset of someone who really doesn't understand just how little it takes to work and/or retire comfortably. The vast majority of people don't need to travel the world in a private jet to enjoy retiring luxuriously in their 50's (or in most cases even earlier).

[Retric]

Most 'professionals' quickly reach the point where money is really more about status than anything else. Sure, there are a few toy's, but the gap between a 25k car and a 250k car is not actually that big for most day to day driving. Often a 50$ watch is more useful than a 50,000$ watch.

Rent a 35' boat for a weekend and it's a fun experience, own a 35' boat and it's a long term hassle.

Not that status is useless. Being able to afford a high status area has plenty of knock on benefits. But, where the benefits of a middle class vs poor are might be huge past that there are significant diminishing returns.

So, IMO it's really a question of how much you care about status vs. any thing else. 50 year old with 90 million in the bank are a dime a dozen in some circles, where a CFO at Google get's a long list of people paid to do what they say.

[hsitz]

"Most 'professionals' quickly reach the point where money is really more about status than anything else."

This sounds like something a young person would say. It's certainly not what most successful "professionals" would say. Most professionals feel like they're on a work treadmill same as everyone else, except they're doing it to support a more expensive house, more expensive cars, more expensive clothes, more expensive food, more expensive education for their kids, more expensive frills than people who make less money.

The consumer society we live in encourages/creates spending patterns that almost unavoidably rise right along with our salaries. These patterns of high spending then feel like they're "necessary" and they raise the bar for what feels like a safe retirement nest egg. It is possible to avoid this consumer-society treadmill, but it's not easy -- it requires swimming against the stream -- and a relatively small percentage of people do it. Avoiding it is basically what the Mr. Money Mustache website (referred to in other posts in this thread) is about, and it's interesting to note that the people who seem to gravitate to that plan often retire with a fraction of what "professionals" would consider a safe retirement nest egg.

[nandemo]

> * Most professionals feel like they're on a work treadmill same as everyone else, except they're doing it to support a more expensive house, more expensive cars, more expensive clothes, more expensive food, more expensive education for their kids, more expensive frills than people who make less money.*

I'm confused as to why you think this is not about status.

[smtddr]

Not OP, but I can tell you what I've been experiencing. It's not about status, I don't care about impressing anyone else.

After leaving at&t to work in trendy-SF-startup tech scene, my salary sky-rocketed. So I get married and have 2 kids. You'd think I'd just be relaxed and happy right? I was; and I am still really, but that relaxing time gave me more time to read stuff like HN, etc.

--- I read a ton about poor public education in USA... and now I need a private school. Or, I need to move into a neighborhood with million dollar houses to gain access to their super-amazing public schools.

--- I read about horrible quality of food and watch "Food, Inc.". Now I've restricted my whole family's diet to USDA Organic, non-GMO from WholeFoods and my monthly grocery bills easily exceed $1,000.

--- Today I'm still driving my first car, Honda Civic LX 2002. It's great right? For me yes, all I do is drive 20mins to BART station and back. But I have a wife & 2 kids; time for a family vehicle. I could just get something cheap & used, right? Then the thought of my wife being stuck in a broken-down vehicle somewhere with our 2 kids hits me and I'm like... "Nah, I better make sure I get a nice, new & reliable, many airbags vehicle with GPS and everything to keep my family safe" It's kinda FUD really, but when it's my own family and I have the money, YOLO.

--- Clothes? Today I have a standing desk, but I use to sit a bunch. I started noticing that cheap jeans do feel less comfortable. Before I know it, all my jeans are near $200 from GUESS. They don't look fancy, you can't tell they're from GUESS. But they feel great.

I didn't do any of this to impress anyone. I just want the best for my family. And I've learned that the definition of "best" keeps moving higher and higher the more I read about stuff & experience things.

[cjg]

The pursuit of the "best" is the problem. How about "adequate"?

[mathgeek]

Agreed. There's also a huge red flag in the mindset that I saw as I was reading that lifestyle choice. We're all going to die some day, which throws another huge strike against pursuing the best above enjoying life. Add in the pipe dream of living forever that is being sold these days (just as it has been many times before), and it only makes "living well" seem more and more difficult. Assuming we can even somehow define living well...

tldr: Find what makes you feel content. Be willing to stop doing other things.

[hsitz]

"I'm confused as to why you think this is not about status."

You can say it's about status if you want; it has some truth as an objective, detached description of what's happening. For purposes of our discussion in this thread, though, I would say it's neither very interesting nor accurate. And more importantly, it's not helpful. People's _subjective_ motivation for purchasing things rarely has anything to do with status. If you think you're going to be able to avoid the same money issues by virtue of being less status conscious than every one else, you're probably wrong.

The helpful thing to recognize is that our consumerist-society is driven by ads and social cues that create what we perceive as _needs_. This combines with the simple and hard-to-combat psychological fact that we tend to spend more money if we have more money. So as their income rises people tend to find more "needs" and spend more and more.

Just saying that people fall into this trap because they're status conscious, and that you'll avoid it because you don't care about status at all, is not going to help you. The psychological effects that you'll need to battle in our consumerist-society are more subtle and difficult to shake than that. Go read some of the stuff at that Money Mustache site; that may help you realize that that the issues people deal with in trying to spend less are not about status. For a start, try this one, http://www.mrmoneymustache.com/2013/08/29/luxury-is-just-ano...

[mathgeek]

"Often a 50$ watch is more useful than a 50,000$ watch."

Another factor that comes into play is your mental balance. A man with a $50k watch is a lot more worried about what his wrist bumps into than a man with a $50 one.

[eigenvector]

Nah, an even higher level of status than having a $50k watch is having it and not giving a shit if it gets damaged cause you'll just get another one.

[artmageddon]

Not to mention who's looking at it when walking down the street...

[zeroonetwothree]

The cost of a car is only weakly related to how well it suits you. I find my $12k car much more pleasant than many much more expensive cars I've tried (I admit I haven't tried anything in the $250k range).

[jaynos]

I'm much more comfortable in my used Subaru. My fear of buying a new car comes from knowing that I don't want to spill coffee in it (and I definitely would).

[yunfangjuan]

>> "50 year old with 90 million in the bank are a dime a dozen in some circles"

First time I ever heard about this, actually.

[roel_v]

"the gap between a 25k car and a 250k car is not actually that big for most day to day driving"

Look, I generally support your point, but even the gap between a 25k and a 75k one is big. Having a 100k, 1 million or 10 million are vastly different.

[acjohnson55]

Really? I don't think anyone's saying there aren't major physical differences in the actual car at those price levels, but the core utility is pretty much the same for all practical purposes.

[vinceguidry]

After a certain point, practicality takes a back seat and other concerns become primary.

I love my Mazda 3. It does everything I want it to do. Looks great, drives fast, has a loud stereo. But I will eventually replace it with a soundproof car. Why? Because I plan to move in town, and my car has already become the one place I can go to listen to music loud on demand without having to resort to earphones. Once I move in town, I won't be able to just hop in my vehicle and crank it up. I have to get out of the parking deck, get out onto the highway if I don't want to be a douche about it. It's not a refuge anymore.

I can't not move in-town, and I can't not have my refuge, I rely on it. Without it my stress level goes up, and when you have a lot of money, the best use of it is to reduce stress. A soundproof car is not a 'need at all costs' sort of luxury that a private plane becomes for high-profile CEOs that have a serious need to not deal with commercial air travel, I can get by without it for awhile, but at some point the advantages will outweigh the tradeoffs and I'll spend a gross amount of money and dump a perfectly good automobile for one that solves a very specific need.

[roel_v]

Well I guess the crux is the difference between what one considers 'major differences'. It's true that a 25k and a 75k car will bring one or multiple persons from point A to point B. A $500 clunker will do that, too. 25k will get you (sticking to new cars for the sake of the discussion, but the same dynamics hold for used) a Camaro, a Dodge Grand Caravan or a Ford Escape. 75k gets you a BMW X5 or a Porche Cayenne Hybrid. The room in those cars, the level of comfort, the quality of the drive is of a different level than in the first 3. Is it 'worth' it? Of course that depends on your frame of reference. For somebody with a commute of an hour, or somebody who regularly goes out to ski or on longer road trips to visit family, it's a real difference.

Back when I was a student, or even when I just had my first job, I looked at cars in that price range and thought that people would have to be nuts to spend that much on a car. Now that I'm in my mid 30's with a family, the BMW X3 I drive doesn't seem like such an extravagance it once did. If I had 2 million I too would semi-retire, but the X5 or Cayenne would be out of my price range - the yield on 2 million doesn't make it fiscally responsive to buy a car of that price range. But somebody who retires with 10 million could. And they could dine in much nicer restaurants much more often (for those into that), and do a bunch of other things that would be a real difference from those with 2 million.

Which brings me to the second point - what's the difference between having 1 million or 10? Well quite a lot. 1 million will let you 'retire' if you're content with a lower-middle class lifestyle and do some paid work you enjoy every now and then. 10 million lets you retire comfortably and lets you go on holidays abroad a few weeks or months a year. It still 'only' (yes yes, first world problems) affords you a house in a nice but not upper class neighborhood, and you won't be jetsetting first class around the world with it. Is that 'necessary'? Of course not, billions of people would literally give their right leg for just a fraction of these amounts. Yet most people in my (Western European, mid career professionals) social circles don't consider it 'wealthy' or would be content with such a lifestyle for the rest of their lives, without any prospect of advancement.

Maybe there is a similar case for the difference between 10 and 100 mil, or 100 and a billion, I don't know - I don't have that much money, most likely never will, and I don't hang around with anyone like that either. But I can imagine that the people with the 50 feet boats in the marina (the 100 million crowd) have a different lifestyle from those with boats that can go from Miami to Monaco (the 1 billion crowd).

[Retric]

I don’t agree that you need to stick with new cars for apples to apples comparison; it’s just a question of value for money.

I agree there is a large bump from a 500$ Junker that's likely to break down and say a 25k used 2013 Acura TL with 15k miles. However, the gap from a 25k 3 year old used car in great condition and a 35k new car of the same model is not that great. And the gap between a 35k car and a 70k or 250k car is again there but not that huge. The 25k is long past the point of not breaking down on the side of the road; it's got heated power seats, heated power side mirrors, auto dimming rear view mirror etc.

Don't get me wrong the next bump is real and say automated cruse control is useful. But, it's less useful than you might think and you can expect that to be part of the basic 25k package before too long.

As to retirement I am saying early retirement on ~5 million where driving a 25k car is a completly reasonable choice is where dimmining returns start to hit hard.

[Thieum22]

Indeed, Mr Money Mustache is a good resource for people looking for an early retirement with an average salary:

http://www.mrmoneymustache.com/

[brianwawok]

Even faster on a nice engineer salary.

[ska]

The amount of salary doesn't really matter so much as the fraction of it you are willing to live on long term.

[pessimizer]

You don't live on fractions, but on absolute amounts.

[Kliment]

The "fraction" refers to expense rate versus savings rate. If your "absolute amount" is low enough relative to your income, your savings rate is high so you can retire earlier.

[ska]

But that's the point. This process is "faster" on a higher salary if and only if your final target income isn't also higher. For many people this will not be the case, e.g. the person with a 100k/yr salary has a higher retirement cost of living targeted than the person with 50k/yr salary does.

Of course, if you are happy living a 50k/yr lifestyle and retirement but happen to make 100k/yr, yes, you should be able to retire much faster.

[brianwawok]

It has a HUGE impact.

The MMM lifestyle is something like 25-30k to live.

If you make 50k.. you can save at most 20-25k, taking (10-15 years to retire, would need to do math).

if you make 200k, you can save 150-175k, reaching retirement in 2-3 years.

The "higher income -> higher lifestyle" is a myth MMM tries hard to dispel. You don't NEED newer cars because you make more money. You don't NEED a bigger house. Sure you can choose those things...

[ChuckMcM]

Yes he did, this is a very poorly written article. I know lots of people who have retired "early" because they came into enough money[1] that they didn't need to work for their lifestyle any more. As the mmm[2] web site is pretty good at pointing out, you don't need a whole lot to live pretty comfortably, especially if you're not going to work every day so you can live where property values are low.

There are people who feel financially insecure even with tens of millions in their accounts, and then there is a friend of mine who walked away with $1.2M after selling his house during the dot com run-up and moved to Boise, IA. He's been there ever since and really loves it.

In my experience the people who "can never get enough" are the unusual cases, not the folks who just happen to like what they are doing and it pays well, but people who focus all of their energy on increasing that number at the bottom of their portfolio account.

There are a whole lot of people who are "retiring" than you read about in the funny papers. They don't call it retiring of course, because retiring carries a stigma of sitting on a porch sipping mint julips and telling stories about the 'good old days', but they feel bad about calling it 'full time vacation mode' which is really what it is.

[1] Generally technology people of course, and generally through stock they owned in a company they worked at as an employee.

[2] http://www.mrmoneymustache.com/

[austinlyons]

Boise, ID? :)

a funny related t-shirt from Raygun: Ohio, the great potato state (above an outline of Iowa).

https://s-media-cache-ak0.pinimg.com/736x/2f/ea/93/2fea932c7...

[ChuckMcM]

Argh :-) of course. is malatypism a thing?