Frugal couple accumulate large nest egg by choosing not to live beyond means

Seattle Times ^ | 01/04/04 | Kathleen Lynn

[Rays_Dad]

ping for later read

[templar]

Great story - good people - however I would say that no one ever owns property in the USA, even when there is no mortgage.

But you do own the exclusive right to do with it whatever you choose. As long as it is a State approved use, of course.

[meyer]

Now that I've read through it, it is an interesting thread. Perhaps even thought-provoking. Here's a subject that gets us all thinking about the financial balance and compromise we deal with in life. Do we save now for the future, blow our income as fast as we can, or look at all of our goals and live accordingly. Perhaps this will promote some financial soul-searching among those reading the thread.

[dalereed]

"You still pay the government "rent" in the form of property taxes. And, if you don't pay, your "free and clear" home is gone. Got it!"

Never hapen!

Being in California with Prop. 13, I have enough cash to pay the property taxes on my home and condo for over 60 years and there is no way i'm going to live that long since i'm 66 now.

[templar]

. I'm going to write a book on an alternative startegy for anyone who wants a life that consists of more than counting your pennies.

Good idea. When a guy hits his death bed I don't think he'll be reminiscing over his net worth as much as the things he did or didn't do, the adventures he had or didn't have, all that he stood for or all that he failed to stand for.

I'm getting old enough now to consider my eventual demise, but I'll tell you one thing: If I ended up homeless tomorrow, I still wouldn't trade a million bucks for all that I have done in my life to date (and I still intend to do significantly more).

[Dec31,1999]

Without kids they needed SOMETHING to strive for...

Being married without having kids is just like going steady.

[NittanyLion]

When a guy hits his death bed I don't think he'll be reminiscing over his net worth as much as the things he did or didn't do, the adventures he had or didn't have, all that he stood for or all that he failed to stand for.

My sentiments exactly...

[ironman]

"Mortgages are down to 5.8% (mine)"

That makes getting a home (big) loan even better.

"cars are available at very low rates"

may be true but not tax deductible.

"investments don't yield what he claims they do"

He claims "stocks have been averaging more than 10% since 1926" and that appears to be accurate. I found "S&P 500 was invented in 1926, it has returned 10.47% a year, and the Dow industrials 9.99%."

Where I live real estate is a fantastic investment. As the saying goes location location, location. Nothing is for certain but my house should do very very well. It is way more house than I need which means I'll make twice as much appreciation if I'd bought something half it's price. Since I'm a fairly good handyman I can do the maintenance myself and improvements to further force it's value up. It the princpal of leverage.

[dalereed]

"I fully expect to have spent a good deal of my wealth prior to passing on"

My mother always told us to get with it and make our own way since her will was going to say "being of sound mind, I spent it!"

It wasn't entirely true but my parents did enjoy their money.

[templar]

A life spent in perpetual fear of lawyers is a life not worth living.

Socrates --- 2004.

It doesn't hurt to practice a bit of proactive self defense, though.

[sawyer]

Everyone has some help along the way.My father paid off his home in 5 years but I recall he always gave credit to my grandmother for giving him the $1000 down, a very large amount in '37 and in '37 a $6000 home was a big amount but the paying off made his life better as he had all the money that would go to bank for his family.I recall my mother was in 60's before she had 2 credit cards and she was mad but she could not rent a car when she travel with out them.

[nobdysfool]

I think what you're missing is that there shouldn't BE any mortgages/credit card bills/liabilities. Mortgages maybe. But credit cards a definite no-no, and liabilities would automatically be low. Mortgages can be accelerated to pay them off sooner, which is wise.

I am just about to have all of my credit cards and loans paid off, within a month or so. I am so looking forward to that! I have taken the time to set up a spreadsheet to play "what-if" games with my finances, and I'm amazed at what I'll be able to do. The key is to keep my standard of living from creeping up. I plan to buy a home when I figure out where I want to live. My mobile home is paid for, so I may stay here for a while just to build up my savings, and get myself financially healthy again.

PS I live alone, no wife, the kids are out on their own.

[annyokie]

I used the scrapes from my wedding gown to make my boys Christening gowns and had my grandmother crochet lace on the slip, from the linen on the lining of my dress.

[Ciexyz]

I don't mean to brag but I've seen that I save money better than most people I know. For example, a friend and I both retired from the same place of employment (we're both federal retirees) and I was much better off than she was, because I took 400 hours of annual leave into retirement. The agency stretched that AL into the future and said that it covers four federal holidays, so I get paid for those four federal holidays, a bonus I hadn't expected. All that came to $10,000 which is tiding me over as I get accustomed to partial retirement checks until the final amount is determined and I get regular checks.

I carried over the maximum annual leave for at least the past ten years. My co-workers would express surprise: nobody carried over that much. But I looked forward to the future, and saved. I still took vacation time, but I never took the whole five weeks. It added up, because I was frugal.

[annyokie]

It is a car that is bought at aution by a dealer (usually a lease return).

[Desdemona]

buys her clothes at Burlington Coat Factory and Value City (her sister teasingly calls her Karen Kmart).

I'm sorry. There is absolutely no challenge in this. Yes, I dress well, and from the major department stores - but, unless I have to go to a wedding in two hours, I shop the clearance racks. The rule is never spend more than $10 on anything if you can help it.

[raybbr]

Since I'm a fairly good handyman I can do the maintenance myself and improvements to further force it's value up. It the princpal of leverage.

I acted as GC for my house and moved in with over 20% equity and virtually no money down. I can never lose money on my house. I am very handy myself. I did the electrical, plumbing, minor carpentry, cleared the land, painted and did the landscaping. It was darn tough but worth it. Still, like I said, I don't have the time nor the capability to play the market and keep up on the stocks.

I read an article that claimed as he does. It was based on the premise of a windfall of money coming in. If I was to pay off my house I would no longer have to pay the mortgage and could invest the extra money anyway. I would still have the equity to borrow against. I don't get the theory behind his thesis?

[Go Gordon]

I would rather die with "just $100,000" in the bank, and get nicer clothes, than die with $400,000 sitting in line at the K-mart waiting for the blue light special.

Agreed. I would also add that I'd rather raise a family and enjoy the grandkids than to be a couple of frugal fogies. Heck, I'm 43 with three kids. One is married and has a 2 year old. One is living on her own. The last in the nest is 16, plays high school baseball, basketball and bowls. I smoke, drink, own a 21 foot Palm beach center console (paid for) slipped in a NJ marina, drive a 97 Suburban (paid for), will have the mortgage on the house paid off in a year and have no other debt than the mortgage. I don't quite live up to the formula (Salary $110,000 and non-equity savings/investments of approximately $300,000), but I'd much rather live my life than Mr. Frugal and Mrs. Barrenhouse. Besides, since you never know when your ticket will be puncged, you better reach for the brass ring every day you are fortunate enough to wake up.

[marktwain]

When a guy hits his death bed I don't think he'll be reminiscing over his net worth as much as the things he did or didn't do, the adventures he had or didn't have, all that he stood for or all that he failed to stand for.

Of course. But you fail to take into account the fact that the person who is frugal can do more and have more adventures than the person who is constantly in debt and worried about making the mortgage payment with his next paycheck.