# Frugality: Friend or foe?



## Danielvalerio506 (Jul 1, 2017)

Hi everyone!! 

I was speaking about this topic this morning and from my point of view we have to be very careful with frugality in our lives as it can be either helpful and can be also harmful. It can be our friend or become our foe too. 

One simple example: My sister, she is in a comfort zone and she doesn´t want to get out of it!! She has just one rent and with that rent she lives a normal life, she can save and travel the world 3 to 4 times a year but she is always frugal, she doesn´t have any luxuries or anything because she is always saving and I say to her that she has free time to invest in her financial education, to invest, create a business, buy some real estate or stock or whatever she wants I don´t know. 

The point is to make more passive income so that she can have a better life and still travel the world!! 

She says that the money she saves is not to ¨spend¨ it is to travel. 

So here we have a problem: in her mind she thinks investing is spending. 

She wants to have the money in her bank account available to travel anytime she wants instead of making the small sacrifice of investing the money and then saving the returns so that she can travel using the returns of the investment and not the capital money... 

So she keeps living in frugality year after year without really living her life to the full and all because she wants to travel. 

For me it doesn´t really make any sense if she could you take some of the money and invest it and still keep traveling.


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## janus10 (Nov 7, 2013)

I think the earlier in life you make frugality your friend, the sooner, and bigger, will be the dividends (no pun intended) you receive.

If I had, along the way, let lifestyle creep upward at the same pace that work compensation grew, I would not have been able to retire as early. While I have denied myself many things over the years, I never felt that the sacrifice was too great because I had a longer horizon (a "bigger picture" if you will) always topmost in mind.

When beautiful days like this materialize, where I can go for two walks during the day, I get a noticeable level of satisfaction knowing that I'm not facing the work stress that I grew so accustomed to for decades. It is very possible that I will be retired for a longer period than I worked. That's a good ratio...


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## Danielvalerio506 (Jul 1, 2017)

janus10 said:


> I think the earlier in life you make frugality your friend, the sooner, and bigger, will be the dividends (no pun intended) you receive.
> 
> If I had, along the way, let lifestyle creep upward at the same pace that work compensation grew, I would not have been able to retire as early. While I have denied myself many things over the years, I never felt that the sacrifice was too great because I had a longer horizon (a "bigger picture" if you will) always topmost in mind.
> 
> When beautiful days like this materialize, where I can go for two walks during the day, I get a noticeable level of satisfaction knowing that I'm not facing the work stress that I grew so accustomed to for decades. It is very possible that I will be retired for a longer period than I worked. That's a good ratio...


Hello!! 

Yeah I understand that part, but I think my sister really has a problem because there is a difference between being frugal or saver and being stingy even with her own things and desires. 
I know that being frugal is a way of creating financial independence but wouldn´t be easier to earn more instead of earn the same and save more?? I mean you could earn the same and save all you can but you can also earn more mantain the same level of life that you already have and still save because you are earning more...


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## redsgomarching (Mar 6, 2016)

this isnt a case of frugality being a friend or foe. this is the case of her accomplishing what she wants to do with her funds.

in this case, frugality is her friend. just because it isnt what you would do doesnt mean its a foe. 

when she is ready to start saving and investing she will. 

we see it differently, i like to save and be frugal and started at 22-23. now i have enough passive income to take a really nice trip every year if i want to. if not, i add to my portfolio which means the next year i can take a bigger trip, all the while still doing what i want.


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## janus10 (Nov 7, 2013)

Danielvalerio506 said:


> Hello!!
> 
> Yeah I understand that part, but I think my sister really has a problem because there is a difference between being frugal or saver and being stingy even with her own things and desires.
> I know that being frugal is a way of creating financial independence but wouldn´t be easier to earn more instead of earn the same and save more?? I mean you could earn the same and save all you can but you can also earn more mantain the same level of life that you already have and still save because you are earning more...


For some people it is easier than others to earn more. I transitioned into a sales role many years ago not because I wanted to, but because I was embarrassed by the salesperson with whom I was teamed. Even though I knew the potential to earn a lot more money was there, I was still reticent (the stress, lack of job security, and dislike from people who don't know you but don't like salespeople) to jump head first into it.

And, the last position I took I was much more interested in enjoying myself than chasing the almighty dollar. While I deliberately chose a smaller company with less formal processes so I could reduce the stress level, it turned out a few years later to be too much again. I made a choice to give up a high paying job at an employer that suddenly didn't place the appropriate value on the results I provided. I haven't regretted it one bit.

So, someone might look at my situation and judge that I was crazy to give it up. Just like they might judge that I'm a cheapskate for using the Flipp app to price match on groceries to save a few dollars. It works for me, but it may not work for the majority of people.

I think your sister seems to have a work-life balance. Work is a means to an end, which is travel. At some point she may change that mentality because there are some bigger things on the horizon. But, if this is what makes her happy, she certainly isn't harming anyone.

If you think she could benefit from some change, then perhaps use her love of travel as the leverage. E.g. If she could amass a sizeable investment portfolio with blue chip dividend paying stocks, there would be a time where the annual dividends would pay for her travel in perpetuity. I've heard the same philosophy used to help people with their desire to have a new vehicle every 10 years - get a six figure portfolio together that has a dividend income stream that covers financing cost of a new vehicle and you won't need to come up with the cash ever again.

My wife and I helped each other out by coming closer from our opposite ends of the spectrum - she didn't think too much about saving because that was her ex husband's modus operandi. And, I always put the future as a priority over the present. I relaxed some, and she tightened up some. It made us a better couple and I think we are both happier because of it.

Hopefully your sister and yourself can get on to the same chapter, even if you can't get onto the same page.


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## Danielvalerio506 (Jul 1, 2017)

janus10 said:


> For some people it is easier than others to earn more. I transitioned into a sales role many years ago not because I wanted to, but because I was embarrassed by the salesperson with whom I was teamed. Even though I knew the potential to earn a lot more money was there, I was still reticent (the stress, lack of job security, and dislike from people who don't know you but don't like salespeople) to jump head first into it.
> 
> And, the last position I took I was much more interested in enjoying myself than chasing the almighty dollar. While I deliberately chose a smaller company with less formal processes so I could reduce the stress level, it turned out a few years later to be too much again. I made a choice to give up a high paying job at an employer that suddenly didn't place the appropriate value on the results I provided. I haven't regretted it one bit.


Yeah I totally agree with you! 

Sometimes even if you have a great income opportunity or a high paid job the level of stress and other things make you rethink priorities and understand that money is not worth your health your peace and your mental tranquility. 

A lot of people prefer to stay on a shitty job they hate or is affecting their health just because they have a good income. 

The main difference with the way I think and they way my sister thinks is that she doesn´t have a job!! She doesn´t work, she has a commercial property rented and she lives with that passive income so she has all the free time in the world to study and start investing like you said: stocks or something that gives her a steady income to travel for free!! 

Exactly what you said is what I always think she could do but she says investing is the same as spending so maybe that´s the reason I get confused about what she thinks. 
She doesn´t hurt anyone but she could hurt herself in the future is something happens let´s say an earthquake for example and the only thing she has is a commercial property... what if a natural disaster destroys the property? she doesn´t pay insurance because it is ¨too expensive and I want to travel with that money¨ see my point?


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## Danielvalerio506 (Jul 1, 2017)

redsgomarching said:


> this isnt a case of frugality being a friend or foe. this is the case of her accomplishing what she wants to do with her funds.
> 
> in this case, frugality is her friend. just because it isnt what you would do doesnt mean its a foe.
> 
> ...



Yeah I understand everyone has their own dreams or desires. In your case you started saving to build an income stream and that´s what I´ve told her to do because it is the best option, imagine if you at age 22-23 decided to start traveling with that money? you would´ve clearly traveled a lot but today you would have any passive income at all to travel for free.


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## OnlyMyOpinion (Sep 1, 2013)

Danielvalerio506 said:


> ... my sister... she doesn´t have a job!! She doesn´t work, she has a commercial property rented and she lives with that passive income so she has all the free time in the world ... she could hurt herself in the future is something happen... what if a natural disaster destroys the property? she doesn´t pay insurance because it is ¨too expensive and I want to travel with that money¨ see my point?


Excuse me? Is this to say your sister owns a commercial property? How did she buy it? 
Doesn't it count as a passive investment whose income allows her to be financially independent and do what she wants (travel)?
How do you know she doesn't insure it? It would be a business expense. Is she really so dumb as to be uninsured?


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## janus10 (Nov 7, 2013)

Ah, I see. I didn't realize that she didn't have any job and wasn't doing any volunteering or helping out in the community in any way. So, yes, I would be a bit frustrated that she has the potential to do more, even if all she did was volunteer 10 hours per week while still living off her rental income. 

She has achieved FIRE which is all a lot of people want to do.


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## CalgaryPotato (Mar 7, 2015)

I'm a little confused on your sister's situation. So you're saying she just puts all of her money in her bank account instead of investing it? I wouldn't call that frugality... maybe lack of risk/reward understanding? Regardless you can't expect everyone to live the same life you want to live though.

As for the question in general, I've seen people who spend their money like their is no tomorrow and regret it when tomorrow comes. But I've also seen people save their money for tomorrow without enough regard for today and tomorrow didn't come from them. Find the balance. Pay the money for the things that'll truly make you happy in life. Aim to maintain your lifestyle in retirement, not to have it either drop off the cliff, or suddenly expand.


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## Danielvalerio506 (Jul 1, 2017)

OnlyMyOpinion said:


> Excuse me? Is this to say your sister owns a commercial property? How did she buy it?
> Doesn't it count as a passive investment whose income allows her to be financially independent and do what she wants (travel)?
> How do you know she doesn't insure it? It would be a business expense. Is she really so dumb as to be uninsured?


Yes bro she owns it. It was an inheritance so maybe here we can use the old phrase: ¨You don´t value what you get for free...¨
Yes it counts as passive investment that allows her to travel but she could be doing a lot more than just depending on one tenant. 

*Is she really so dumb as to be uninsured?* I think you know understand the point of my thread right?


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## Danielvalerio506 (Jul 1, 2017)

janus10 said:


> Ah, I see. I didn't realize that she didn't have any job and wasn't doing any volunteering or helping out in the community in any way. So, yes, I would be a bit frustrated that she has the potential to do more, even if all she did was volunteer 10 hours per week while still living off her rental income.
> 
> She has achieved FIRE which is all a lot of people want to do.


Exactly!! Sorry guys if I didn´t explain it correctly in the first post. 

She doesn´t work and doesn´t do anything at all for her life or for anyones lives. So basically that´s my point she could be doing a lot with her time, youth, intelligence and rental income than just traveling the world and spending the rental. 

So yeah I´ve tried to explain things to her because I do like to financially help people and teach them but it is difficult because she is in a comfort zone and she doesn´t want to move from there.


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## Danielvalerio506 (Jul 1, 2017)

CalgaryPotato said:


> I'm a little confused on your sister's situation. So you're saying she just puts all of her money in her bank account instead of investing it? I wouldn't call that frugality... maybe lack of risk/reward understanding? Regardless you can't expect everyone to live the same life you want to live though.
> 
> As for the question in general, I've seen people who spend their money like their is no tomorrow and regret it when tomorrow comes. But I've also seen people save their money for tomorrow without enough regard for today and tomorrow didn't come from them. Find the balance. Pay the money for the things that'll truly make you happy in life. Aim to maintain your lifestyle in retirement, not to have it either drop off the cliff, or suddenly expand.


I say frugality because she doesn´t eat outside, doesn´t go to the movies, doesn´t buy new clothes, some times her car is filthy for more than a month :/ so she is always trying to save a penny in the bank and I believe we all can make a lot more with our lives than living always trying to save a penny or a couple of bucks.


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