Depends where you live. All my jobs after college, I’ve lived a couple blocks from work. Currently I walk 6 minutes from my bed to monitors. I was recently interviewing for a NYC position and had to seriously ask myself how much that convenience is worth. I’ve been trying to quantify it, but it’s definitely more than I initially realized
I did this in Philly and Pittsburgh, it was awesome. I could wake up at 8:40 and be at my desk at 9:00.
It depends on many variables. For example, you can have a good enough income and a well spending behavior, but then you meet people that spends a lot, a fancy girl, or fancy friends. They can push you to another “desire” level.
I’m a simple man, economist, I think in marginal terms, in marginal benefits and costs. By the time my body gets tired (old man), I will desire less work, so less income perhaps (I hope). In the previous years I want to achieve a good house, a nice car, education for kids, and a cash flow that covers daily expenses. More than that would be stupid, like you know… a trip around the world every year, or lots of alcohol, or eating at luxury restaurants every day, etc.
Someone told me once a day that Buddha philosophy was " not to desire", cut the desires and you will be happy. Perhaps there is the secret, hard af.
Enough so that I don’t have to worry about bills or paying off debts, have enough for housing and food, and a bit on the side to pursue interests with, plus time to work out and study. So not an insane amount. I don’t have much I want that I need money for. I’d want to pursue finance and investing regardless of whether $ was a thing in it.
Mr Money Mustache’s blog is a good read. Like anything I take a lot of what he says with a grain of salt but there are some useful tips in there. A lot of it is common sense but sometimes you need a dude like that to turn the lightbulb on. For instance, I read a lot and his article about using the library kicked me in that direction and made me realize every single book I’ve bought on Amazon in the last few years is available for free. So I gave myself a small raise without making any more money, and now I’ll save it. Hooray.
I also started walking a lot more versus using my car for everything and I’m not sure how much it’s saved me but I’ve certainly been feeling better physically and mentally for it. Again, a common sense approach but I needed a push in the right direction.
*shrug*
my view is that every dollar i spend is worth 17 bucks 30 years from now. so that 20k is costing your future self 340k per year. think like this, and you will live a miser.
You think you can get a 10% annualized return for 30 years?
^ S&P 500 over the last 30 years returned that.
In theory. Most people panic-liquidate during crashes, or liquidate to fund unemployment/jobloss, and fail to benefit from the long-term CAGR.
I think there are major structural differences over the next 30.
For starters, you have global population growth moderating from 1.7% over the last four decades to 0.7% over the next four (IMF) and within that a massively declining working age population. Factors nobody seems to get. If you look at the Chinese slowdown in GDP it’s almost exclusively driven by demographics as their working age population sees flattening growth. Also consider unprecedented buildup in global debt over that period which moved future period consumption (next 30 years) into the past period (past 30 years). Global debt to GDP as measured by the IIF rose from 185% as recently as 2000 to 325% in 2016 driven by government borrowing. Layer into that the influence of the tech boom and globalization over the 90’s and 00’s and you basically have to base your review assumption on some deus ex machina event.
There is literally no agency / institute / fund manager forecasting accelerating global economic growth over the next three decades. Which isn’t saying it can’t happen, but you’re banking on a random unforeseen event as your base case by simply relying on historical data despite a clear regime shift.
Not in theory, in actual returns. If you had put $1 into the S&P 500 30 years ago, it would be worth about $17 today (slightly more, actually). Only about 1/2 of Americans even own stocks according to a 2016 Gallup poll (yes, this includes retirement accounts), so most people do nothing during crashes. Of the 50% who are invested in the stock market, I’d wager that less than half even monitor their investments.
Because they didn’t spend enough time on the allocation they are comfortable with or simply couldn’t predict how they will react during crushes. I still don’t know how I will react in the next downturn. It’s not that easy I imagine to stay the course long term
I’m still waiting to hear how we’re going to overcome declining population growth rates and historic debt levels that built a tough growth comp in the past period to match investment returns against a period that was riding globalization and the birth of the internet / pc.
All good points, but the returns are essentially the same (slightly higher, actually) if you go back to 1928. I’d argue that a lot of regime changes have occurred in that time period as well, and things have chugged along in the stock market pretty consistently on a long-term basis. In fact, if you do 30 rolling averages every year since 1928, it never dips below 10.7%. BTW, I didn’t choose 1928 as a starting point, that the first year Aswath Damodaran uses in his calculation of the equity risk premium. The past is never a guarantee of the future, but the stock market does appear to be as close as you can get to a sure thing over long periods.
I’m personally far less aggressive in my retirement planning, estimating only a 7% annual return.
You, and the rest of us on here, are not most people. Comparing the way most financial analysts would react to a change in financial markets to how most people in general would react is like comparing how a soldier reacts to being shot at to how most people react to being shot at.
- Population growth was steadily declining over that entire period. 2) Debt levels were steadily growing. Again, with consensus on my side, the rampant debt build we’ve seen has Econ 101 consequences to demand comped against the period of the buildup. The point about steadily declining population growth is that we were boosted by the invent of widespread manufacturing and higher growth rates early and then later by an outsized tech boom and globalization alongside debt growth. If it was JUST the tech boom I’d leave the door a little more open to a simplistic rearview analysis.
What you’re seeing is slowing underlying demand growth (BY DEFINITION) masked by a debt boom. It’s almost inconceivable for demand to overcome that as as comp on slower population growth.
Robots, and the singularity.
Boom. *drops mic*
But really, I’d be curious what the effects would be if the singularity did occur and people started being made immortal. Would really fuck up a lot of the worlds economy.
I think most analysts convert rather quickly from a soldier to a civilian when it comes the their own money 
This is actually a good shot at things. I’ll stick to my outlook, but that’s interesting.
^ You’re probably right.