Nice youtube link, and good post on the original article. The comments section of that is the real compelling part. Some people are obviously better at saving than others. How this family managed their money is very typical, where more income means more consumption. That’s one of the most difficult concepts for people to grasp. People tend to assume their earnings streams will perpetually ramp up, so behave accordingly. The only ones who are prepared are the ones who view their success as likely being short lived, pricing in ramped up earnings as a one time event.
comp_sci_kid Wrote: ------------------------------------------------------- > Same attitude here. My spending pattern didn’t > change starting in college and ending right now. Cheap hookers?
purealpha Wrote: ------------------------------------------------------- > kkent Wrote: > -------------------------------------------------- > ----- > > XSellSide Wrote: > > > -------------------------------------------------- > > > ----- > > > As I said in another thread a while ago, if > my > > > income went up 5 fold, nobody around me > > (friends, > > > family) would even notice. My goal at that > > level > > > of income would be to save as much cash as > > > possible in expectation of the eventuality > that > > > the gravy train will stop one day. > > > > > > +1. I feel the exact same way. > > > +2 yur both smart. > > Share the same view with most of you guys that > this adman CFO *was a flippin’ idiot*. Isn’t it ironic that these “flippin’ idiots” are also the ones helping to restore the economy
if you’re making 400k a year you had better have a lot more than just $200k saved for retirement! I’m 26 making 60 and i have half that already
Your decision to make savings depends on a lot of things, the pattern of your cash flows, your attitude and etc. This guy thought that he secured his cash inflows with that kind of jobs. So he spent lavishly all the money while been sure that everything would be ok. So he thought to have low volatility cash inflows which were supposed to be matched with low volatility fixed cash outflows (house, vacations). In fact he had a risky/equity type cash inflows which were cyclical (recession sensitive) and mixed patter cash outflows (fixed payments for family, fixed/floating payments for the mortgage and cancellable payments for vacations). So the guy was not so secure as he supposed. That is why he is in deep sheet now as a majority of other finance guys.