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$30K every 4 years for 40 years of working life comes out to $300K in today's dollars, as opposed to a median house at under $200K.
Unless this person would otherwise use a go-cart, this is not the cost for the Lexus. The cost would be the spread between the cost of a lower end car and the Lexus, I also have no idea why you are suggesting someone would purchase a new car every 4 years. A Lexus could easily last 10 years or so.
Obviously someone that has trouble affording their rent or home should not purchase a Lexus, my point was that the idea that purchasing a Lexus was going to set your retirement back "years" is just hyperbole. Furthermore, not everyone cares about retiring early and using this to scorn others makes little sense. Personally, retirement means rather little to me, I don't even really understand the concept.
Only a small percentage of total expenses will be subject to sales tax so it's not a significant burden on one's total tax rate. Plus depending on your situation you may be able deduct sales tax on your tax return.
Maybe only a small portion of your expenses will be subject to sales taxes, but in my case it's over 75%. I pay them on cars, food, utilities, clothes, gifts, medicine, plane tickets, hotels, rental cars, communication, and nearly everything else imaginable.
You may not pay a direct sales tax on items like your mortgage/rent payment every month, but even then you're indirectly paying annual property taxes in their place.
The marginal number is a silly way of calculating it, since every dollar earned will have a certain percentage in deductions, if you do tax planning properly. My point is simply that if you're paying that much in taxes, then you must "invest" in a good accountant who will give you ideas and options for tax shields or tax deductions. No one making 200k or less should ever be paying 50% marginal tax rate, even at dollar 199,999, they should be taking advantage of deductions and tax shields to reduce their tax bill.
No, the concept of marginal returns is absolutely valid when the discussion was about the premise that if one could work an extra 2 hrs for $50, spending 2 hrs to save $10 was time wasted.
Most people don't have a clue what their marginal tax rate really is.
Accountants are not sorcerers who can make tax bills disappear. Back when I had accountants doing my taxes, it wasn't so they could save me money (none of them ever did), but rather to ensure compliance with the tax codes and avoid legal problems.
Unless this person would otherwise use a go-cart, this is not the cost for the Lexus. The cost would be the spread between the cost of a lower end car and the Lexus, I also have no idea why you are suggesting someone would purchase a new car every 4 years. A Lexus could easily last 10 years or so.
I'm talking about people of limited means that did indeed buy (or even worse, lease) new luxury cars every 2-4 years. I know A LOT of people like that. The cost differential is not the price of the vehicle, obviously, but the spread between buying a more modest one and keeping it 10-15 years, and buying a new $30-50K car every few years. Compounded over several decades, it can easily run into the hundreds of thousands of dollars.
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Originally Posted by user_id
Furthermore, not everyone cares about retiring early and using this to scorn others makes little sense. Personally, retirement means rather little to me, I don't even really understand the concept.
Some people work to live...others live to work. Most people plan to retire, otherwise how would we explain the ubiquitous 401(k) account? If somebody wants to keep working until it hurts to pee or they drop dead, I have no problem with that, but having your days to yourself without being accountable to a boss, or investors, or even to yourself if you own a business--is as close to pure freedom as it gets. It's not something that, if I had it all to do over again, I'd go back and trade away for a series of rolling industrial monuments wrought of steel, fake wood grain plastic and fine Corinthian leather...
I'm talking about people of limited means that did indeed buy (or even worse, lease) new luxury cars every 2-4 years. I know A LOT of people like that. The cost differential is not the price of the vehicle, obviously, but the spread between buying a more modest one and keeping it 10-15 years, and buying a new $30-50K car every few years.
I don't get the point of comparing the case where you keep the lower end car 10~15 years and the luxury car for 2~4 years, not to mention you just said "having a lexus....etc". Obviously after 8 years a Lexus is still a Lexus.
Personally, I would not purchase a Lexus as they are essentially Toyota's with a different logo and a 15~20% premium. But any good car is going to run you $22~$24k (perhaps a bit less if its compact), so the Lexus is not dramatically more.
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Originally Posted by Bob from down south
Most people plan to retire, otherwise how would we explain the ubiquitous 401(k) account?
There are incentives to create them usually in the form of matching programs, etc. I have one and I never contributed a dime of my own money to it.
Regardless, most people do want to retire though. But most people don't really enjoy what they do either, so that does not say too much.
If you value retirement that's fine, but not everyone thinks of it in the same way so using this as a measure of your neighbors folly does not make much sense.
No, the concept of marginal returns is absolutely valid when the discussion was about the premise that if one could work an extra 2 hrs for $50, spending 2 hrs to save $10 was time wasted.
Most people don't have a clue what their marginal tax rate really is.
Accountants are not sorcerers who can make tax bills disappear. Back when I had accountants doing my taxes, it wasn't so they could save me money (none of them ever did), but rather to ensure compliance with the tax codes and avoid legal problems.
And my point that your contention that they are paying a 50% tax rate is a gross misrepresentation of reality, even if they made 200k gross income. The reality is their effective marginal tax rate is probably more like 20% or 25% for most people, given what I would consider a "typical" income of someone who would work for $25/hour doing some extra job.
Accountants will have a varied impact on different people's tax bills. My point is simply that if you are paying anywhere close to a 50% effective marginal tax rate with < 200k gross income you probably aren't doing your taxes properly and an accountant would result in some sizable tax savings. Obviously there may be certain, specific situations that would arise where people would have a high tax bill, but in the vast majority of cases there is no way anyone's bill should be that high.
And my point that your contention that they are paying a 50% tax rate is a gross misrepresentation of reality, even if they made 200k gross income. The reality is their effective marginal tax rate is probably more like 20% or 25% for most people, given what I would consider a "typical" income of someone who would work for $25/hour doing some extra job.
No, you're wrong here, it's a fair representation. By the time marginal income is figured, all of the deductions and shelters etc should have already been accounted for.
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Originally Posted by drshang
Accountants will have a varied impact on different people's tax bills. My point is simply that if you are paying anywhere close to a 50% effective marginal tax rate with < 200k gross income you probably aren't doing your taxes properly and an accountant would result in some sizable tax savings.
If you're at $175K a year and NOT paying a close to 50% marginal tax rate you really should get an accountant because you indeed aren't doing your taxes properly and might end up with some big trouble on your hands...due to underpayment.
I don't get the point of comparing the case where you keep the lower end car 10~15 years and the luxury car for 2~4 years, not to mention you just said "having a lexus....etc". Obviously after 8 years a Lexus is still a Lexus.
The point is in comparing behaviors--people rolling over expensive cars often, versus someone who buys something more modest and on a longer recap cycle.
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Originally Posted by user_id
Personally, I would not purchase a Lexus
Me either. The point is the same with a Mercedes, BMW, or Cadillac, too.
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Originally Posted by user_id
There are incentives to create them usually in the form of matching programs, etc. I have one and I never contributed a dime of my own money to it.
I think your priorities will change when you realize that you can't stay twenthysomething, ten-feet tall, and bulletproof forever.
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Originally Posted by user_id
If you value retirement that's fine, but not everyone thinks of it in the same way so using this as a measure of your neighbors folly does not make much sense.
I use it because retirement is something that nearly everyone professes to want, yet so many lament not having enough to do it when/how they'd like. The point is that those neighbors could have enough, had they made hundreds of small savings spanning decades along the way. I'm not talking about eating bread and water for 30 years, either.
No, you're wrong here, it's a fair representation. By the time marginal income is figured, all of the deductions and shelters etc should have already been accounted for.
If you're at $175K a year and NOT paying a close to 50% marginal tax rate you really should get an accountant because you indeed aren't doing your taxes properly and might end up with some big trouble on your hands...due to underpayment.
Many deductions/shelters scale with income so it's not really true, and even then, normal people are not paying 50% taxes even without deductions.
If you don't believe me, that's fine. Enjoy paying your 50% taxes then, I guess. If you want to pay the government that much of your money I am not going to complain. Same thing with all of the other "frugal" members who think the tax rate is really that high. I have very little personal interest in trying to further convince you to pay less taxes to the government if you don't want to believe me.
No, apparently you don't. I use a piece of it to let you know what I'm responding to, while anybody interested can look at your original post.
That was originally my point... you only respond to bits and pieces of my posts, not the posts in their entirety, so you therefore ask questions that are already answered.
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Originally Posted by user_id
As I said, I don't believe you can make a hamburger when all things are considered in 10 minutes. I certainly can't do that.
Yes, you want to be obstinate and not believe it. But it only takes 2-4 minutes per side to cook a burger. For anyone. If it's taking you 15-20 minutes it's only because you're moving slowly.
Saving paper does not benefit me personally, so why would I do it? The cost of the paper is next to nothing.
Saving paper does benefit you personally, but not directly. Paper comes from wood/trees. Wood is a limited resource. The cost of lumber and other wood-based products is directly related to the supply and therefore the cost of wood.
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Originally Posted by user_id
Then there is not much to discuss, really. If costs are relative, then frugality is relative. Also, I asked you a question, I was not suggesting it was relative or otherwise.
Costs are always relative to individuals to a large extent. There are considerations that should be made by people on a wider basis, though, because there are many things which affect our lives collectively which can only be influenced on a collective basis. This is why concerns about the environment factor into frugality.
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Originally Posted by user_id
Interesting, because you did not mention this in your as time spent to make your burger. This would obviously result in additional time spent, you have to select the meat, wait in line, talk to the butcher, etc.
Fine, factor in an extra two minutes, it never takes me longer than that. Besides, time is not a resource that is entirely measurable strictly by the amount of time. If I am giving myself an hour to do some grocery shopping in an evening, then using the time I have in that hour is different from using the time I give myself to go out for the evening. In any case, go ahead and add 2 minutes to the time it takes to make a burger, it's still less than fast food.
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Originally Posted by user_id
Personally, if I wanted to eat something more lean I'd use Turkey or a chicken patty.
Personally, if I wanted Turkey or a chicken patty I use Turkey or a chicken patty, but when I want beef I use beef. And I like beef very rare (cold and raw inside), so the leaner it is the more tasty it is. Plus the leaner meat is healthier by being lower in fat. If I'm grilling burgers which will come out more cooked than I normally like then a higher fat burger is better, but it needs to be better cooked to break down the fat, so it will be tender.
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Originally Posted by user_id
I don't mind McDonalds, I just don't eat there often. Why? Because there are better options. I will go to McDonalds here and there and get a Big Mac combo though.
You did not get what I was getting out. You talk about quality, yet you are eating cheap preservative packed pseudo-ice cream out of a paper tub. This stuff does not compare at all to fresh ice cream.
What kind of "fresh" ice cream are you getting in a shop that's any better than the Turkey Hill ice cream I bought at the supermarket? Turkey Hill is not "cheap", it's a good quality ice cream. It was on sale when I bought it and I got a premium ice cream at a low price. You're calling it "preservative-packed" without even knowing what you're talking about.
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Originally Posted by user_id
Because I don't find saving $360 to be significant, I should give away $360?
Well, if it's not significant to you then what's the problem?
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Originally Posted by user_id
You're not talking about saving $360 with no change in my standard of living, you're talking about saving $360 by significantly changing my standard of living.
I'm talking about saving $360 by slightly (at best) changing one's standard of living. You are trying to make everything I bring up out to be such a hassle and chore, as if it's such a waste and burden that it's not worth it, meanwhile you have never even tried any of it. "Oh, making your own burger, it's 30 minutes, it's SO HARD, plus all the time to go and buy the meat, and the bread, and all the time to clean up all that mess, oh it's so much work, so hard, such an impact on my standard of living...and reusing ziploc bags, it's so hard, all that time it takes to turn them inside out, and wash them all those hours spent, greatly detracting from my enjoyment of life, ...." .... blah, blah, blah, whine and moan.
There is no SIGNIFICANT change in standard of living in any example I gave. In fact, my standard of living is greatly improved, in the big picture, and I have hardly done any extra work for it.
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Originally Posted by user_id
Decent amount of money? A sandwich sized ziplock bag costs around 2 cents (if you buy generics, or in bulk). I just tried it, putting a bag inside out takes around 5 seconds. So that is around 8~9 minutes just to put the bags inside out, say it takes 10 minutes or so to wash them. $2 for 20 minutes of my time? No thanks.
Yes, putting bag inside out takes 5 seconds. It takes me at least 10 seconds to get from my seat in the lunch room at work to the door of the lunch room when I'm leaving, so by the time I'm out the lunchroom door the ziploc bag(s) that I used is(are) turned inside out and in my lunch bag. So it's not an additional 8-9 minutes. See, that's part of being frugal, too; recognizing ways to use time so that a small, easy task that would otherwise cost me 8-9 minutes out of my life only ends up costing me zero minutes out of my life, and benefitting from that.
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Originally Posted by user_id
Your actions have no noticeable effect on these things, its the collective action that does. As a result, you don't benefit personally from them.
My actions are indeed noticeable when combined with the actions of others. When I was buying gas like it was nothing, so was everyone else. When gas skyrocketed to over $4 a gallon, I cut way back on my gas usage. So did everyone else. It may have been out of necessity for most people, because the cost was so high. In any case, when gas prices came down, they actually at one point tumbled to well under $2 a gallon, and this was credited to a typical supply vs. demand scenario; people had learned how to economize and save gas when it was expensive and they stuck to habits like those after prices came down because they realized there was never a need for them to be gas gluttons in the first place. They were only careless about it because the market allowed them to be. Collectively they were all able to affect the price of gas. Even now it's less than it was 3 years ago.
So in a way you're right - I can't control the actions of others to ensure that my part in conservation will translate into a savings to me. It's also hard to measure the impact I and others who do what I do are having on the costs of items and waste disposal. But I know I'm doing all I can to lower costs and I'm sure that with all I do it has some effect somewhere.
Even so, all these frugal measures I take have other, more direct effects on me, regardless of the collective benefits.
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Originally Posted by user_id
This is why issue regarding pollution are so tricky, our personal constribution is so tiny in either direction.
Issues regarding pollution are not tricky; we pollute and our entire society's quality of life is diminished. What's tricky is assigning $$$ amounts to that destroyed quality of life. What 'tricky' means in this case is "we don't want to assign a $ amount to quality of life or other detrimental effects of pollution so that major corporations and other entities and individuals who are the biggest polluters can continue to do so with impunity".
If people had to pay for their waste they'd be figure out a way to be more frugal, out of necessity. That's why environmental laws and regulations need to be enacted and enforced, things like cap and trade are a start. Waste disposal and pollution are costs that have often been passed over by the polluters and as time goes on and we learn more and pin responsibility on those responsible.
The problem is that even when we pin it on a corporation, they pass that cost back on to us, the consumers. So we are ultimately responsible for the pollution and waste we create.
If you feel that you have no moral or ethical responsibility to your society in reducing waste then that's your prerogative. It's a self-centered view, but it's your right to be self-centered. It's not a frugal attitude. Frugality, while relative to an individual, is not about selfishness. Frugality is about having abundance and sharing of it, because you were able to eliminate waste. It's about understanding a larger picture than one's own wants and figuring out a way to benefit oneself through benefiting others. It's about prioritizing what one truly wants and not wasting on those things that are less important.
I live just outside NY city. I often go to spend time at a homelless shelter there. I will gladly sacrifice a meal at a Thai restaurant for a much cheaper meal and use the difference to feed another person or two or three. But I still, at times, DO have that meal at the Thai restaurant. Which is frugal? Neither; it's all relative. The frugality is in the big picture. The frugality happened when I examined all the times I'd have a good sit-down meal (like the Thai place) and how often I did it without a thought; not a thought to my wallet (I knew I could "afford" it), to my own mentality, to my community. Now I am saving more money for myself, helping others (which has an indirect benefit to me, again, since I'm benefiting my own society), and I think things through and appreciate things.
You may look at it and say something like, "Yeah, but you gave up a meal you really wanted at the Thai place, so you lowered your standard of living just to save a few bucks which you threw away on some homeless people." No. I gave up a meal that I always THOUGHT I "really wanted". When I sought less expensive alternatives, I discovered great alternatives. Now I still have those more expensive meals, but I also enjoy less expensive meals which enable me to save and share some of the savings with people who really need it. I also now have an appreciation for those more expensive meals, and I no longer take them for granted.
As I've said many times before, frugality is not being cheap. Cheap is always more expensive. Cheapness is not prudent when it's about money alone. Frugality is about improving efficiency, reducing waste, to enhance our lives and raise our standard of living.
fru⋅gal [froo-guhl]
–adjective
1. economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.
2. entailing little expense; requiring few resources; meager; scanty: a frugal meal.
See? It's right in the definition. PRUDENTLY saving or sparing. NOT WASTEFUL.
You seem to want to exploit the fact that there are many people who confuse frugality with being cheap and then just harp on that. And yes, there are people who confuse frugality with being cheap. But that doesn't change the fact that they are different things.
You seem to be afraid that exploring options in frugality will lead you to being an irrational skinflint, a scrooge who would rather toil for hours with a piece of string and chewed bubble gum to pull a nickel out of a sewer grate. You mischaracterize so many frugal options as being these massively tedious and oppressive chores which will greatly lower your standard of living. You're afraid of frugality. Perhaps there's good reason; perhaps you had a confrontation with a cheapskate who was cheap and not frugal, but called himself frugal.
An easy way to tell a frugal person from a cheap person is that a frugal person will rarely say that something is an absolute, but a cheapskate will. For example, a frugal person will say that it's possible for a dinner out to be part of a frugal lifestyle; a cheap person will say it's never possible for dining out to be "frugal".
I think people make the mistake of confusing frugal with cheap because often, to be frugal, we do things that we have always been taught is "cheap", and taught that it is something shameful. There is a degree of truth to that; it IS shameful to be a cheapskate. But somewhere along the way, what being a cheapskate means was distorted to include a lot of things that were not just "cheap" but actually frugal. And that's the problem we see today. Your attitude is a perfect example of it.
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