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Old 05-08-2011, 01:13 PM
 
Location: Conejo Valley, CA
12,352 posts, read 10,751,862 times
Reputation: 4086

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Quote:
Originally Posted by jtur88 View Post
No, they only have more money than before, which in most cases simply means a bigger house or a newer car or a larger plasma screen and bigger amps and speakers, and otherwise basically the same lifestlye.
You are once again just focused on your straw-man, more money doesn't necessitate buying bigger TVs, etc. In the case you brought up the family could take $4k and do something nice with their family with it, perhaps go on vacation, perhaps buy some fun new toys, etc and they can save the other $4k. That is, they could both increase their enjoyment and increase their savings.

Personally, I find this to be the best strategy, though I save/invest a larger percentage of additional income. It enables you to both enjoy your additional income, yet invest ever increasing amounts of money. Its a lot easier to allow your standard of living to slowly grow upwards than to continuously old it back and/or reduce it.

In terms of trading days, etc for higher income. Nope. My income increases due to my time in college and my continued reading/thinking after college, both of these activities I enjoy/enjoyed greatly. Today, despite making dramatically more than I did when I was finished school, I don't spend anymore hours working. Actually, I think I worked more hours on my first job as it was a salaried position without specified hours (research job).
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Old 05-08-2011, 04:08 PM
 
Location: Victoria TX
38,762 posts, read 39,513,404 times
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Human beings being what I've seen them to be, I would bet that a majority of wage earners watching a 19-inch TV and driving a ten year old car, if they got a $10K a year increase in income, they wouldn't keep on watching a 19-inch TV and driving a ten year old car. Some would, yes, but if you want to say that most would, I would reply that I don't think you know very many wage-earning workers.

Unless a person is already living a committed frugal lifestlye, spending less than he earns and already saving part of his income, he is living only as frugally as his income forces him to be, wishing he didn't need to be so frugal, and would quickly expand his opulence to the degree his wage increase would allow.
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Old 05-08-2011, 09:45 PM
 
Location: Conejo Valley, CA
12,352 posts, read 10,751,862 times
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Quote:
Originally Posted by jtur88 View Post
Human beings being what I've seen them to be, I would bet that a majority of wage earners watching a 19-inch TV and driving a ten year old car, if they got a $10K a year increase in income, they wouldn't keep on watching a 19-inch TV and driving a ten year old car.
So your argument now is that people shouldn't make more money because they will be too impulsive and/or stupid to save it, yet these same people will be able to cut spending from their existing budget?!
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Old 05-09-2011, 05:27 AM
 
Location: Victoria TX
38,762 posts, read 39,513,404 times
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Quote:
Originally Posted by user_id View Post
So your argument now is that people shouldn't make more money because they will be too impulsive and/or stupid to save it, yet these same people will be able to cut spending from their existing budget?!
Try reading for comprehension. My argument was NEVER that people shouldn't make more money. It is that people should be realistic in evaluating their earning potential, and not waste their lives chasing a golden ring that is beyond their capacity to earn. I certainly never implied that "these same people" could or would or should all uniformly do exactly the same thing. Unlike yourself, who cluster all of humanity into one single set, obliged to do what you find to be fulfilling to your own lifestyle needs.

I've identified two subsets. People who have developed the mindset of frugal living, who can comfortably regulate their spending in order to have something left over to save, given regular work at a decent hourly wage. And, on the other hand, people full of consumerist zealotry, for whom happiness equates to buying stuff, who will squander additional income. Nobody said both groups are "these same people".

Everybody is capable of significantly reducing their spending, and are often forced to. But NOT everybody is capable of significantly increasing their earning, which is a fact that lies beyond your otherwise rich and fertile imagination.
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Old 05-09-2011, 07:59 AM
 
Location: San Diego California
6,355 posts, read 3,460,581 times
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Quote:
Originally Posted by jtur88 View Post
Human beings being what I've seen them to be, I would bet that a majority of wage earners watching a 19-inch TV and driving a ten year old car, if they got a $10K a year increase in income, they wouldn't keep on watching a 19-inch TV and driving a ten year old car. Some would, yes, but if you want to say that most would, I would reply that I don't think you know very many wage-earning workers.

Unless a person is already living a committed frugal lifestlye, spending less than he earns and already saving part of his income, he is living only as frugally as his income forces him to be, wishing he didn't need to be so frugal, and would quickly expand his opulence to the degree his wage increase would allow.
What I have witnessed for many people, is that as the amount of their savings increases they become more and more complacent about the need to save and the wealthier they feel.
At some point they do something compulsive like purchase a large ticket item and spend a good part of what they have saved. In the old days they called it money burning a hole in their pocket.
The only long term savings they seem to be able to hang on to, is what is difficult to spend.
Home equity used to be a big wealth builder before HELOC's became ATM's.
Building wealth is dependent on delaying gratification regardless of how much money you earn.
There are plenty of people who have made enormous amounts of money and lost every penny of it because it is always possible to spend more than you make.
Frugality is fundamental to upward mobility regardless of income.
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Old 05-09-2011, 02:11 PM
 
Location: Conejo Valley, CA
12,352 posts, read 10,751,862 times
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Quote:
Originally Posted by jtur88 View Post
It is that people should be realistic in evaluating their earning potential, and not waste their lives chasing a golden ring that is beyond their capacity to earn.
Who has suggested that people should be unrealistic about evaluating their earning potential?! Again...just another straw-man.

Quote:
Originally Posted by jtur88 View Post
I've identified two subsets....
Yep, you've identified that and that is just the point, you're ignoring the very topic. Namely, the person that forgets frugality and focuses on revenue generation and builds wealth via saving a portion of his/her increased revenue.


Quote:
Originally Posted by jtur88 View Post
Everybody is capable of significantly reducing their spending, and are often forced to. But NOT everybody is capable of significantly increasing their earning, which is a fact that lies beyond your otherwise rich and fertile imagination.
Really? What stops someone from increasing their earnings?!
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Old 05-09-2011, 02:20 PM
 
21,340 posts, read 16,987,358 times
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Quote:
Originally Posted by user_id View Post
Really? What stops someone from increasing their earnings?!
Their own will. That's about it. Maybe physical and mental disabilities as well... but those are outliers.
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Old 05-09-2011, 03:12 PM
 
Location: Victoria TX
38,762 posts, read 39,513,404 times
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Quote:
Originally Posted by user_id View Post
Who has suggested that people should be unrealistic about evaluating their earning potential?! Again...just another straw-man.

Really? What stops someone from increasing their earnings?!
Same answer to both questions: Each individual has a practical limit to how much he is capable of earning, aside from some Pennies From Heaven scenario in which one lucks into a deal that he is unworthy of. Pennies From Heaven is not a very mature guideline for a person to follow in his personal aspirations, and there is no point in continuing to discuss personal finance with anyone who steadfastly insists that the best course of action for EVERY person is to dedicate his entire life to maximizing each day's income from a Herculean effort.

How else is this to be interpreted:

Quote:
Originally Posted by NJBest View Post
All it is saying is that you can earn more money rather than reducing expenses and you will have the same result.
That is being "unrealistic about evaluating their earning potential". Just like saying all I need to do is try harder and properly apply myself more diligently, and I can throw a 98-mph fastball. That is being unrealistic about evaluating my baseball potential, which has an upper limit.

Last edited by jtur88; 05-09-2011 at 03:22 PM..
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Old 05-09-2011, 03:27 PM
 
Location: Conejo Valley, CA
12,352 posts, read 10,751,862 times
Reputation: 4086
Quote:
Originally Posted by jtur88 View Post
Each individual has a practical limit to how much he is capable of earning, aside from some Pennies From Heaven scenario in which one lucks into a deal that he is unworthy of.
They do? How does one determine this practical limit?

Quote:
Originally Posted by jtur88 View Post
That is being "unrealistic about evaluating their earning potential". Just like saying all I need to do is try harder and properly apply myself more diligently, and I can throw a 98-mph fastball. That is being unrealistic about evaluating my baseball potential, which has an upper limit.
Again, nobody is suggesting someone would be unrealistic. Making an additional 10%, instead of cutting spending to save 10%, is not a unrealistic goal.
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Old 05-09-2011, 07:01 PM
 
Location: The Triad (nc)
17,765 posts, read 24,178,754 times
Reputation: 14985
Quote:
Originally Posted by user_id View Post
They do? How does one determine this practical limit?
That is the problem. You won't really know until it's too late to change.
An example of them are the 95% of new restaurants that fail in the first year.

Quote:
Again, nobody is suggesting someone would be unrealistic.
Not one of those 95 (of 100) "entrepreneurs" would have allowed you to call their plans and intentions unrealistic.

Quote:
Making an additional 10%, instead of cutting spending to save 10%, is not a unrealistic goal.
"Shoot for 100, settle for 50"
It's nice when it happens.
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