# Spending Less vs. Earning More



## randomthoughts (May 23, 2010)

Personal finance gurus seem to have two approaches. I've chosen rather extreme exemplars to illustrate, and wonder what opinions CMFers might have.

Saving: This seems to have gone out of vogue - recently, there's a lot of derision directed toward the 'latte factor'... the idea that cutting out minor indulgences can have a meaningful effect on one's financial well-being. On the flip side, there are still a lot of advocates of frugality. (Suze Orman)

Earning More: Advocates of increasing earnings seem to be advocating the possibility of becoming wealthy through earning more money, instead of focusing on spending. (Ramit Sethi, iwillteachyoutoberich.com)

Personally, I've had the luxury of using the Savings approach, which works well with a moderate income. I've found it easier to avoid unnecessary spending than earn more money - my lifestyle has been about minimizing costs and avoiding lifestyle inflation. (I spend less/save more today than I did when I started working, due in part to saving enough to pay off the mortgage, and despite increasing income.) But I'll never be rich (possibly very comfortable, if all goes ploddingly well).

If one has unexceptional drive, ability and intelligence, saving seems more realistic. When my peers with comparable attributes (personal and financial) try to earn more, they tend to get into trouble - shady hedge funds, pyramid schemes, insurance wierdness like Primerica etc.

Savings pitfalls seem tame by comparison - the worst I can think of is Group RESP crap.

Thoughts?


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## MoneyGal (Apr 24, 2009)

Ramit focuses on earning more not through hedge funds or any kind of investing, but charging more for your services/starting a small business/getting a raise. As in: most of his focus is on human capital, not financial capital. 

Here's his rationale (as I understand it): it takes foregoing 5,000 $2 lattes (or any $2 indulgence) to save $10K. Wouldn't it be more efficient to focus on earning $10,000 (or $1000 or whatever figure you like) versus saying "no" 5,000 separate times?


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## PrairieGal (Apr 2, 2011)

I take a two-pronged approach. I earn extra money by bookkeeping from home (in addition to my full-time job), and I also try to be frugal and save money. Plus, any raises or bonuses I get go directly to savings


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## FrugalTrader (Oct 13, 2008)

I'm with PrarieGal, i'm all about keeping expenses reasonable while looking for ways to increase income.


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## Cal (Jun 17, 2009)

randomthoughts said:


> If one has unexceptional drive, ability and intelligence, saving seems more realistic. When my peers with comparable attributes (personal and financial) try to earn more, they tend to get into trouble - shady hedge funds, pyramid schemes, insurance wierdness like Primerica etc.


Depending upon how hard you try to save, or how littel one may earn, it may actaully require exceptional drive, ability and intelligence to save.

I don't really think you need to be a genius to learn finances, or investing, but you do need some intelligence and discipline. Perhaps your peers downfall is that they learn after they make a decision and loose $, rather than learning about what they are investing in, setting financial goals/plans, prior to making their 'investment'.


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## doctrine (Sep 30, 2011)

> Here's his rationale (as I understand it): it takes foregoing 5,000 $2 lattes (or any $2 indulgence) to save $10K. Wouldn't it be more efficient to focus on earning $10,000 (or $1000 or whatever figure you like) versus saying "no" 5,000 separate times?


I would say most lattes are closer to $5 than two, especially with a couple of extras. So it might only be 2000 lattes, not 5000.

The other issue is that the 2000 lattes are paid for by after tax dollars. So, you would actually need at least $15,000 in income to pay for your lattes. Or conversely, to save $10k, you only need 1333 lattes, instead of 2000. 

Every dollar saved is two dollars earned (well perhaps $1.5). Still, it's best to do both as increasing your income by a steady amount will pay off, but more so if you can do so frugally.


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## nathan79 (Feb 21, 2011)

I'm pretty firmly in the saving camp. I've always found it much easier to save than to earn more. 

I've never had a particularly well-paying job, but when I consider the better paying jobs I've had, I've tended to enjoy them less than the lower paying ones. With more pay comes much more stress --usually because those jobs involved dealing with more people. I'm definitely not a people person, nor do I have exceptional drive and ability.

Saving is a piece of cake in comparison.


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## lonewolf (Jun 12, 2012)

I base spending less or earning more on my values.

I value my time & energy that is required to earn the money.

I value more highly my needs (food, shelter, clothing, transportation that the money will buy more then lifes energy used to obtain the money. (If I dont meet my needs I die)


As for wants, which also includes spending more on food,shelter, clothing I do the following

I spend money if I value that which I want to buy more then I value the time & energy needed to replace that money.

I earn more money if that which I want to buy I value more then the time & energy spent earning the money.

I also take into account if I spend that money I will have less of it working for me.

I also take into account I will not take it with me when I die.

I do not waist lifes energy making money to buy things as a status symbol or to be part of the herd because it adds no value to my life.

I like to be productive & streach my dollars or not even use them to add value to my life.

I like to be productive & when I have worked for money & or have money work for me so I add that which I value to my life.


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## uptoolate (Oct 9, 2011)

Saving has definitely been our main thrust. The job I have at the time is the job I have and saving has allowed me to take jobs for reasons other than financial considerations which has been a great luxury. As well, living well below our means has allowed my wife to spend more time out of the workforce or working part time while our children were younger and also doing jobs that she found more rewarding in non-financial terms.


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## My Own Advisor (Sep 24, 2012)

"Here's his rationale (as I understand it): it takes foregoing 5,000 $2 lattes (or any $2 indulgence) to save $10K. Wouldn't it be more efficient to focus on earning $10,000 (or $1000 or whatever figure you like) versus saying "no" 5,000 separate times?"

Totally agree, well said.

I take a two-pronged approach. If I want a fancy coffee, I will buy but I need to give something else up to counter the expenditure. Thus, I try and save money when and where it makes sense.

I also try to grow my income over time.

The thing is, you can't take it with you. Saving and investing is prudent and can be fun but you need to live after all. The latte factor annoys the hell outta me.


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## meddlesomemarmots (Feb 16, 2011)

I put most of my efforts into saving, and then earning more.

I basically look at life at the moment as being comfortable if I allocate a decent amount of income towards the future - which will then give me the ability to pursue higher income (be it be having cash to pay for schooling/qualifications or putting money into the other half's small business). However, I think that saving is the more important of the two. People can earn millions, and go broke due to a lack of financial responsibility - where Mr and Mrs Bloggs can live a comfortable life by living within their means, and planning for the future.


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## Jon_Snow (May 20, 2009)

My wife and I are giving it hell with both barrels. We are fortunate to earn a fair bit (170k gross) and spend comparitavely little (30k).

Somehow we don't feel that deprived living on 30k a year... no new cars or big houses are in the cards, but what do a couple of D.I.N.K.'s need those for anyway? We view our generous income as a gift not to be wasted by spending it on crap - so we choose to save 70% of our income instead. Not sexy, but it works for us.


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## Plugging Along (Jan 3, 2011)

I think saving is the most important of the two. It doesn't matter how much one earns if they spend it all (or more). 

I think the concept of the latte factors is that many people when they don't earn much feel that they aren't spending much on any big items so can't cut anything out of their budge. I hear people say they don't go on vacations, buy expensive cars, designer clothing, etc, but then will spend the $5 on a latte, $10 on lunch, another $3 on a snack, etc. It's the little things that will add up to thousands of dollars in a year.

In terms of earning more, I think there are multiple ways, it could be through investments, it could be through income, etc. I have always equated it to the human capital that MG refers to. It takes potentially more work, but the pay offs are larger. 

I think the savings approach is merely 'find ways to save money'. This is really hard for most people, hence why the latte factor is so widely discussed. Really, it's about making small changes that can add up. For those that can make big changes, then do it.

For us, we do a combo approach. We save on the small things that don't matter to us, however we will still have alot of expenses. We have choosen to pay a premium for some 'convinence' or time saving items that may not be frugal but allow us to have more time to focus on our careers.


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## pwm (Jan 19, 2012)

I've been a saver all my life. It's just how I roll. I paid off my mortgage at 35, and retired at 55 while my wife did not work outside the home. We now live very comfortably on $35k per year. My income from pensions and investments is around $80k after tax. What do I do with the remainder? Save it of course! My children will be the beneficiaries of a large inheritance but that's the way it should be because they deserve it.

We've never been to Mexico or Hawaii. Never wanted to. I always drove my modest cars for at least 14 years; the last one for 18. I get great satisfaction from our lifestyle. Making more money is not the answer, it's living within one's means and being thankful for what you've got that leads to financial success.


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## kcowan (Jul 1, 2010)

My approach was to focus on earnings for the first 20 years, then focus on savings and tax-savings in the next 20 years. During the whole time, I never bought frivolously but I did spend much more than I did later.

If I had it to do over again, there would be one focus: personal leverage.


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## Rysto (Nov 22, 2010)

MoneyGal said:


> Here's his rationale (as I understand it): it takes foregoing 5,000 $2 lattes (or any $2 indulgence) to save $10K. Wouldn't it be more efficient to focus on earning $10,000 (or $1000 or whatever figure you like) versus saying "no" 5,000 separate times?


Isn't $10 000 a 20% raise over the median Canadian income? If you can get it that's great but I'm very doubtful that many people have the ability to increase their income by that much. More importantly, the extra $10K does you no good if you can't keep your spending in control.

Most people have way more control over their spending then they do over their income. That's another reason why personal finance people tend to focus on the spending side.


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## MoneyGal (Apr 24, 2009)

Those were dummy numbers to make a point, not prescriptive numbers making suggestions.


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## tombiosis (Dec 18, 2010)

This thread topic is very similar to a book I am currently reading...called "Spend til the End"...
here is a review:
http://www.wisebread.com/book-review-spend-til-the-end

The book has made me realize several things I hadn't considered. 
In my profession, I have the opportunity to make much more $ if I so chose, so I am constantly debating the "work more" vs. "relax more" equation... One really needs to achieve a healthy BALANCE. I find this very hard to do.
I often wonder what it would be like to take the small wealth I have built up, and re-locate to somewhere else, where I would be among the "very wealthy"...does anyone know anybody that has tried that?


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## crazyjackcsa (Aug 8, 2010)

The truly wealthy do both, save and improve what they earn.
The middle class to varying degrees does one or the other, or a little of both.
The poor do neither.

You can't earn your way to riches if you spend more than you make. You can't save your way to wealth if the income is too small to start with.

A 25-year-old couple that wants to retire with 1-million in today's dollars at 65 needs to save $500 a month and earn 6% over inflation every year. That's the reality. How they get there is up to them.


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## fraser (May 15, 2010)

crazyjackcsa hit the nail on the head.

And the situation will only worsen as the wage gap in Canada continues to grow. I am one of the fortunate ones. A modest lifestyle and a lucrative career in the IT industry allowed me to retire early.


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## SuperGrover (Oct 24, 2011)

I think it really is a balance of both if you want to retire early. I think MMM has it laid out best. It is not a matter of dollars but rather the percentage of income you can save. In really simple math, if you are able to save 50%, then for every year you work you have one year of retirement saved (not including the power of compounding, which works in your favor). Save 75%, you save 3 years etc. 

So I think the most important factor to early retirement is the % of income you are able to save (makes it a balanced approach of both)


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## rikk (May 28, 2012)

SuperGrover said:


> In really simple math, if you are able to save 50%, then for every year you work you have one year of retirement saved (not including the power of compounding, which works in your favor).


Yah but ... if you make the effort to say double your salary (net), and therefore double your savings, would you not half the time you need to work ... or ... would not 1 year work = 2 years retirement saved?


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## MoneyGal (Apr 24, 2009)

Your simple math is too complex for these savers, rikk. :02.47-tranquillity:


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## SuperGrover (Oct 24, 2011)

rikk said:


> Yah but ... if you make the effort to say double your salary (net), and therefore double your savings, would you not half the time you need to work ... or ... would not 1 year work = 2 years retirement saved?


Technically with doubling your salary but keeping your expense the same would be more along the lines of 3 years retirement saved. 
50% -> 25% spending and 75% saving (aka 3 years saved). But yes it would work out quite nicely by improving your salary. I am much more along the lines of increasing your earnings, going to apply for my peng today, I already know it will increase my salary quite nicely with my company. But without saving a good portion of it, not really effective for your retirement.


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## Barwelle (Feb 23, 2011)

kcowan said:


> If I had it to do over again, there would be one focus: personal leverage.


Can you clarify: you're talking about borrowing to invest?


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## blin10 (Jun 27, 2011)

balance balance balance ...


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## Ponderling (Mar 1, 2013)

Two pronged aproach here, but slanted to the saving side mostly.

I before kids did not shy away from working lots of extra shifts. I worked in land development design-engineering at the time, and the work was crazy busy from Nov - May, and pretty busy thought the year some years. It was not unusual to work 75-80 weeks for a few months and mostly 50-55 hours year round. You ended up pretty burned out, but the up side was as long as you where a siver, there was not a lot of time to spend the money being earned. 

Kids shifted my focus. I now work 8-5, and am salaried in the present job. Proposals to bid for new work projects can see me working late or taking work home, but with my klds still not to old to have no use for Dad, I would rather be available to participate in thier life after 5pm most of the time. 

I have a laminated spread sheet snap shot in my wallet. It shows me what my after deductions, fixed expense, committed semi variable expenses (groceries, drug store presumed minimums) and savings goals funds I have to spend. It also shows what the net time I work in a year is (less stat holidays and vacation time). The final key info is the amount of time to work to generate a certain amount of disposable income. 

This is an adaptation of ideas advanced in your money or your life'- read many years ago. It tells me I have to work 1 day to generate $97 of disposable income.

So if I want to buy something that totals $100, I can say to myself, is that worth a days work to me in hapiness, versus a day not worked and not owning it?

When I say no often enough on the discretionaly purchases, at year end I end up with added funds to invest, so the do I want to work that extra day query becomes closer to a real qestion, rather than a hypothetical one.


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## randomthoughts (May 23, 2010)

Thanks for the responses, it's been an interesting read, especially since there was a good variety of opinions, perhaps slightly more biased toward saving, with some notable exceptions.

For sure, one can be too poor to save, or too spendy for even a large income. And of course, it's best to be a frugal high-earner!

I've been upfront about my focus on saving. I'll add that frugality gives me a sense of security as well. I know that I can live on a miniscule salary, even if I don't have to right now. I suppose I identify with jon_snow the most - I'm grateful for my salary, but I'm comfortable living on about 30% of it - actually, it feels extravagant, some days.

Where the latte factor appeals to me is that I abhor unconscious spending - the latte is just representative of many things that people spend money on without thinking or appreciating. And that's tragic if they can't afford it and are busting their butts because they don't 'earn' enough.

'Balance' for me is setting aside money that I'm required spend on pleasure. If I don't spend it, it accumulates and does NOT get absorbed into savings - which is always tempting. I also track what I spend on incidental fun (McDonalds! A latte that I enjoy with guilty pleasure! Guilt is DELICIOUS.) vs awesome-omg-fun (3-star Michelin dining, which I also love, but many would consider wasteful). I try to maximize the latter with restraint on the former.


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## steve41 (Apr 18, 2009)

Jon_Snow said:


> My wife and I are giving it hell with both barrels. We are fortunate to earn a fair bit (170k gross) and spend comparitavely little (30k).
> 
> Somehow we don't feel that deprived living on 30k a year... no new cars or big houses are in the cards, but what do a couple of D.I.N.K.'s need those for anyway? We view our generous income as a gift not to be wasted by spending it on crap - so we choose to save 70% of our income instead. Not sexy, but it works for us.


 By DINKS, you mean 'no kids', so my question is..... "Is the SPCA in for a big windfall, or what?"


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## Jon_Snow (May 20, 2009)

steve41 said:


> By DINKS, you mean 'no kids', so my question is..... "Is the SPCA in for a big windfall, or what?"


Not gonna lie... I have no idea what you mean by this.


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## Nemo2 (Mar 1, 2012)

Jon_Snow said:


> Not gonna lie... I have no idea what you mean by this.


Heirs to the fortune?


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## blin10 (Jun 27, 2011)

Jon_Snow said:


> Not gonna lie... I have no idea what you mean by this.


you came up with DINKS, he came up with SPCA, both of you don't understand each other... haha that's good stuff... KGLT


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## My Own Advisor (Sep 24, 2012)

Funny.

Another reason, or not, to avoid acronymns. 

Need to start a new thread, the best use of personal finance and investing acronymns. 

For example: How to calculate ACB for non-reg. ETFs, MFs or stocks? 
Another example: How to pay down the mortgage faster using the SM, the principal RE, creating a HELOC and borrowing for investment purposes.

On a more serious note, back to the original post, a good question to ask and hopefully I can do both more over time (spend less, make more) to retire earlier. I enjoyed reading what pwm and Jon_Snow wrote. They really seem to have their act together.


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## Jon_Snow (May 20, 2009)

I always thought that the DINKS acronym (Dual Income No Kids) was pretty well ingrained in the financial lexicon. I admit to being annoyed by the dropping of obscure acronyms as well.


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## kcowan (Jul 1, 2010)

Barwelle said:


> Can you clarify: you're talking about borrowing to invest?


Not specifically. I am talking about getting the maximum $ for each hour that I worked. Investing would be based on inside knowledge and financial leverage would only be used selectively and for short periods.


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## rikk (May 28, 2012)

MoneyGal said:


> Your simple math is too complex for these savers, rikk. :02.47-tranquillity:


Well I was going to do the double your salary, but the taxes increase, and other stuff, so how much are you really ahead calculations but then decided "Changed my mind ... keep it simple" ... reason for edit :listening_headphone


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## Barwelle (Feb 23, 2011)

kcowan said:


> Not specifically. I am talking about getting the maximum $ for each hour that I worked.


I see. Personal leverage meaning human capital (and increasing it), to borrow a term from MoneyGal.


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## Hawkdog (Oct 26, 2012)

Interesting, we are D.I.N.K.S as well (230k gross). But we go with the save one salary spend the other. We both have relatively new vehicles as we like driving them. Its more about the reliability than anything else. And they are not the fanciest models either, I don't even have power locks or windows but I can drive for 2-4 hours out into the middle of nowhere and not worry as much about breaking down.



Jon_Snow said:


> My wife and I are giving it hell with both barrels. We are fortunate to earn a fair bit (170k gross) and spend comparitavely little (30k).
> 
> Somehow we don't feel that deprived living on 30k a year... no new cars or big houses are in the cards, but what do a couple of D.I.N.K.'s need those for anyway? We view our generous income as a gift not to be wasted by spending it on crap - so we choose to save 70% of our income instead. Not sexy, but it works for us.


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## 1.5M (Apr 21, 2012)

Continually chasing income increases is a way to never get out of the rat race. It's being encouraged in our society because it has the side effect that the really rich people get richer (having you buy all their crap that they keep throwing at you). Another unfortunate side effect is that everyone really need higher income to escape the rat race anytime before senility settles in. 
So one needs to chase income increases long enough to achieve escape velocity in a moderate amount of time. Frugality is a must. You don't want income increases to be able to afford all the crap. You want more income to become free. Buy only what you need and get off the wheel as soon as possible.


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## doctrine (Sep 30, 2011)

Good point, 1.5M. Saving and investing is a must to stop working, which is why I save and invest.


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## Young&Ambitious (Aug 11, 2010)

Jon Snow -> SPCA is http://www.spca.bc.ca/


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## Jon_Snow (May 20, 2009)

Young&Ambitious said:


> Jon Snow -> SPCA is http://www.spca.bc.ca/


Quite aware of that, but thanks anyway.


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## HaroldCrump (Jun 10, 2009)

1.5M said:


> Continually chasing income increases is a way to never get out of the rat race.


It also means you get snared in the progressive taxation trap.
As you jump each tier, a higher and higher % of your earnings are going towards taxation, thereby diminishing the returns on your labor.
Everyone will have a point of inflection, where they say screw it.


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## AGHFX (Aug 31, 2012)

I like to work both sides with moderation. Of course if I _can_ earn more money I'm going to accept. The issue is sometimes this is easier said than done. I'm at the beginning of my career path and it takes a few years of experience and professional designations in my industry before you can simply negotiate a $10,000 raise.

On the flip side, I do my best to save _in moderation_. I only really started taking an interest (and control) of personal finances and investing about a year ago. For a while my mantra was "worry about the pennies and the dollars will take care of themselves." It got to the point though where I felt I was foregoing _too much_ present utility for the sake of future utility - so I found balance. I save where it's convenient and makes sense to me. Small things like buying items you need on sale and avoiding frivolous expenses pay off. I pay myself first - but just enough that is sufficient for my savings goals, while leaving enough left over so I can enjoy my life today as well. I'm not one to buy a latte or go for a beer after work _every day_ - but if I'm in the mood for one, I'm certainly not going to forego the enjoyment for the sake of saving a few dollars.

I don't think there is a one-way approach. What I have wrote above works for me, but might not work for you. I think the key is *balance* and however you define balance is just fine.


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## brad (May 22, 2009)

HaroldCrump said:


> It also means you get snared in the progressive taxation trap.
> As you jump each tier, a higher and higher % of your earnings are going towards taxation, thereby diminishing the returns on your labor.
> Everyone will have a point of inflection, where they say screw it.


I'm not sure if this ever really happens in practice, though. I'm in the second-highest tax bracket in Canada (if I lived in Nova Scotia I'd be in the highest), and if someone said "you're getting a $500,000 raise, but after taxes it'll only be $270,000," I wouldn't turn them down. 

The only case in which I've seen any effect of my marginal tax rate on my behaviour is in bonuses, which are taxed at my marginal rate. If I have to do extra work to get a $1,000 bonus that will actually end up being closer to $550 after taxes, I'm (slightly) less motivated. But the reality is that I don't pursue that work because there's a bonus waiting for me at the end; I pursue it because it's interesting or will add to my experience and my c.v.

Interest on my savings accounts is taxed at my marginal rate too, as far as I know, but that doesn't stop me from putting money in the bank.

I think the impacts of progressive taxation on people's behaviour are more theoretical than actual.


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## MoneyGal (Apr 24, 2009)

brad said:


> The only case in which I've seen any effect of my marginal tax rate on my behaviour is in bonuses, which are taxed at my marginal rate.


But this is how all income that you earn above your 'ordinary' wages is taxed: this is what the concept of a "marginal rate" expresses!


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## brad (May 22, 2009)

MoneyGal said:


> But this is how all income that you earn above your 'ordinary' wages is taxed: this is what the concept of a "marginal rate" expresses!


I know, but I was using it as an illustration that the high marginal tax rate doesn't influence my behaviour in any significant way.


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## 1.5M (Apr 21, 2012)

The highest marginal tax rate starts at a very low income. It's hard to avoid that rate and at the same time be able to save/invest enough while still having to work. I think the progressive rate should have been really progressive, not progressive only for people with incomes up to 1% of highest incomes (one has the same marginal rate at 200k/year as someone at 20M/year).


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## MrMatt (Dec 21, 2011)

I'm focused on being careful with my money.

I'd like to earn more, but I don't know how. I know a number of people who have money losing side businesses and some of them have lost a LOT of money.


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## hystat (Jun 18, 2010)

I look after the dollars, and the pennies won't matter. Latte's are not going to bother my wallet. 
for e.g. 
I probably spent 1000 hours house shopping when I bought this house. That netted me a house $50K below market value. $50/hour pretty decent "2nd job". 
I drove 3 hours to buy a used car that was a few thousand below comparables. Probably made $500/hour doing that.

I educate myself when I can to save money, but not nickle and dime stuff. (unless there's some fun in it)
I don't cross traffic to get 50 cents off a bag of milk. In my head I have a price on my time I suppose.

By accident, I figured out a hobby"jobby" that I like too that is good for making some extra cash. I think one has to stumble upon that sort of thing.


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## Plugging Along (Jan 3, 2011)

I used to think the pennies didn't matter, and did my research on the big items. I bought my new vehicle in US for $20k less than Canada, cheaper than an used, house was below market, etc... 

Then I read a really interesting article about what the true cost of conviences are. The seemed like pennies but really added up.

For example, it was calculated for the mark up of shredded cheese vs regular cheese was equivalent of paying someone $80 an hour to shred your cheese, and that was using a manual shredder with cheese that isn't on sale, same thing for alot of the little processed convience foods. 

I do look at my time in terms of $/hour now. It seems like it is frivoulous to spend $100 on a cleaner a week, that for someone for 4-5 hours, and would take me at least 6-8 (I am a slow lousy cleaner). That works out to $15 an hour if I do it myself. Cheese takes me 5 minutes to grate a bag, that will save me $80/hour. So the cleaner is a better deal than cheese.

As said many times, it's all about balance.


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## kcowan (Jul 1, 2010)

Both of these are good examples of personal leverage. Calculate the return on time spent and spend it on the highest returning activities. In my early years, it was in my job and house purchases. In latter years, it was spending and investing.


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## fraser (May 15, 2010)

I can still remember my grandfather saying to me...."take care of the nickels and dimes..and the dollars will take care of themselves."


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## Ponderling (Mar 1, 2013)

Plugging Along said:


> For example, it was calculated for the mark up of shredded cheese vs regular cheese was equivalent of paying someone $80 an hour to shred your cheese, ...it's all about balance.


I was grocery shopping for my morther at a first tier grocery store she likes. In the next check out aisle was obviously a couple shopping for hosting a party. 

Three prepared trays of cold cuts. Three prepared trays of cut up vegetables, a couple of bags of buns and four blocks of nice deli counter cheese, one bottle of mayo, one dijon mustard- totalling: $323.

Holy **** I thought to myself. I could see the cheeze buns and mayo and mustard going for maybe $60-100. So the rest went into the act of slicing and arranging maybe $50 in cold cuts and $40 in veggies.


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## MoneyGal (Apr 24, 2009)

But they haaaaave to spend all that money on sliced cheese! Think of the cheese-slicers!


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## 44545 (Feb 14, 2012)

I read a quote the other day that went something like, "the size of your bladder makes it impossible for lattes to ever bankrupt you."

If you take it literally, sure, but the attitude it takes to make a statement like that is often associated with people who rationalize a lot of different "latte-like" habits. 

Latte here, SUV there, dining out every lunch, new shoes every week - it becomes a never ending list that does bankrupt people. (just watch any show featuring Gail Vaz-Oxlade)

On topic, and it was mentioned already, spending less means taking less of a bite out of after tax dollars, making it far more effective, dollar for dollar, than earning more. 

I would also argue it's easier to spend less than to earn more; you're accountable only to yourself for spending but to someone else for earning.


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## steve41 (Apr 18, 2009)

I just plugged back into this thread and noticed that I hadn't clarified my DINKS/SPCA post.

What I was referring to was the fact Jon grossed $170K but only spent $30K. Since he had no kids, he might think about a nice large multigazillion dollar donation to all those cute dogs and cats.

BTW..... did any of you above ever contemplate plugging salary, retirement age, current capital, pension factors, loans, RESPs, insurance pmts, future sale of real estate, anticipated inheritance (both from your parents and to your estate), a spending profile and a (hi/lo/med) market rate, etc..... and actually crunch and what-if the saving/spending numbers?

After all, each of you have more computer power on your laps than the entire resources NASA used to send a man to the moon. Jes sayin.


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## 44545 (Feb 14, 2012)

steve41 said:


> ...did any of you above ever contemplate plugging salary, retirement age, current capital, pension factors, loans, RESPs, insurance pmts, future sale of real estate, anticipated inheritance (both from your parents and to your estate), a spending profile and a (hi/lo/med) market rate, etc..... and actually crunch and what-if the saving/spending numbers?...


I do this weekly, if not daily, using Microsoft Money. The built in "Lifetime Planner" (and cash flow scenario tool) do exactly what you're describing, effortlessly.
Things like, "What if I routinely earn 'x' more per month?" or "What if I reduce my spending by 'y' per month?" - it's all there with lovely charts.


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## steve41 (Apr 18, 2009)

Good to hear. I wish everyone got into the habit.


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## Jungle (Feb 17, 2010)

The big eye opener for me was tracking our spending for the last 6-7 years. I can look at a yearly amount and see how much we would need based on our habits and spending. Subtract things like transit or work, etc and it looks better. 

Also I like using the happiness factor. If I spend $22k per year, (assuming no debt), how much can I increase my happyness by spending more money? Take all this inconsideration while being very efficient with common expenses and being a smart shopper. Definitly worth the time and effort for me.


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## iherald (Apr 18, 2009)

CJOttawa said:


> I do this weekly, if not daily, using Microsoft Money. The built in "Lifetime Planner" (and cash flow scenario tool) do exactly what you're describing, effortlessly.
> Things like, "What if I routinely earn 'x' more per month?" or "What if I reduce my spending by 'y' per month?" - it's all there with lovely charts.


Anyway to do this without MS Money? I do a net worth spreadsheet but don't do a lifetime planner.


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## Jon_Snow (May 20, 2009)

steve41 said:


> I just plugged back into this thread and noticed that I hadn't clarified my DINKS/SPCA post.
> 
> What I was referring to was the fact Jon grossed $170K but only spent $30K. Since he had no kids, he might think about a nice large multigazillion dollar donation to all those cute dogs and cats.


Thanks for that Steve... I kinda figured that's what you meant. 

Well, for one thing, there hopefully won't be a "multigazillion" sum for anyone, be they canine, feline, or my vast array of nieces and nephews. I fully intend to attempt the "die broke" route, but I fear that our ingrained frugality may prevent us from treating ourselves to some nice luxuries as we grow older. We are currently saving 5k every month with very little effort - and yet we still wring our hands when we spend triple digits on a trip to the local Safeway. 

We need to confront this at some point or yes, we will likely be passing on a sizable sum to SOMEONE.


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