What's the point of amassing wealth and living below your means?

[MakeAStash]

The main reason to put $ aside is to give yourself options. When the job or boss go nuts, you can tell them to shove it since you won't be desperate for a paycheck at week's end. Working longer is very often not an alternative to saving because a surprisingly high percentage of people develop health problems years before they are eligible to collect SS.

[pflyers85]

Those that ignore money or easily discard money are typically those that do not have a lot of it. Money likes attention and it tends to gravitate and proliferate among those who pay it the most attention. Call it micromanaging or whatever you want but living below ones means is certainly more favorable than the opposite.

Personally I don't subscribe to the idea that its fine to spend more now if you are committed to working longer simply because life rarely goes exactly as we plan. Who is to say I will physically be able to work longer? As MakeAStash astutely points out, many people have serious health conditions prior to hitting retirement age so working longer is not a viable option for them. Also what if I am cruising along in my career and about 5 years before I plan to retire I get laid off? Good luck finding a job at that age that paid as well as the previous employer.

I'm not saying that it is wise to live life assuming the worst case scenario will come true. But it is definitely possible to find a balance of enjoying some of the fruits of your labor in the now while adequately preparing for unknown obstacles later.

[QuarterMillionMan]

For me it gives me peace of mind. It is really nice to know that I have emergency funds available if needed. It is also empowering knowing that I'm in control of my finances and not driven by debt. On the other hand someone who has a lot of debt must feel as though they are in bondage and not in control of their finances. I know a lot of people like the latter. One person stated that she knows she will die with a large debt load. Another person stated what's the point of living without taking advantage of all the available debt given to her. She has no problem leaving all of her debts to her children to manage for her, her exact words.

[msomnipotent]

I find that the more money I have, the less stuff I feel I "need", so living below my means is easier.

[97guns]

What's the point of not saving and living above your means, all it does is guarantee you work until you die

[bjl584]

I save and live below my means now so that I don't have to work till I drop over dead.

Retiring early and being able to enjoy life while I'm still healthy enough to do so is all the motivation that I need to stay the course that I'm on.

[Singuy]

What's the point of not saving and living above your means, all it does is guarantee you work until you die

The mentality is that if you work hard, you should play hard.

I can see people with very little hope of making a high income may have this mentality. Sure this person can eat beans and rice till 65 and then retire on more beans and rice...or just say F- it..there's a lot the world has to offer so lets just travel the world and live it large...if I have to work till 90 then so be it..if I have to declare bankruptcy then whatever...

I believe this is what the OP is wondering. What's the point of saving when you barely make anything to begin with? Will this person actually invest the savings and one day make it big? What are the chances of that happening?

All the millionaires next door did not make 30k/year as their household income....

You really have to attack your financial situation from all fronts.
Living below your means is just one piece of the pie. The person must also increase that income and make sound investments.

[97guns]

The mentality is that if you work hard, you should play hard.

I can see people with very little hope of making a high income may have this mentality. Sure this person can eat beans and rice till 65 and then retire on more beans and rice...or just say F- it..there's a lot the world has to offer so lets just travel the world and live it large...if I have to work till 90 then so be it..if I have to declare bankruptcy then whatever...

I believe this is what the OP is wondering. What's the point of saving when you barely make anything to begin with? Will this person actually invest the savings and one day make it big? What are the chances of that happening?

All the millionaires next door did not make 30k/year as their household income....

You really have to attack your financial situation from all fronts.
Living below your means is just one piece of the pie. The person must also increase that income and make sound investments.

when one begins to save it will amaze them how quickly the savings grows, it becomes addictive and a way of life.... but many dont want to or know how to begin, just like a diet, the first phase is the toughest then it all gets easy

[Gailete]

Part of the thought, I would think behind accumulating wealth, is that no one knows the future. I'm glad that I learned to live a fairly frugal life and was living below my means when I got hit with a chronic illness that took me out of the regular work force in my mid-40's 14+ years ago. Unfortunately I was still picking up the financial pieces of an ex-husband that thought money was free. So I hadn't had a chance to accumulate much of anything yet. So now I'm on SSD, and work an on line business as I'm able and hubby also works his business as he is able and let me tell you, we sure wish we had more accumulated, but I am very proud of the money I have managed to stash away over the past few years. Not wealth like most people would look at wealth, but for me it tells me I do have a bit of a nest egg and encourages me to keep adding to it. I plan on keeping saving until both I and my husband can no longer work. We will never have a luxurious lifestyle, but we do have what I need to enjoy life right now.

I still remember a discussion on another forum when I urged the folks that if possible to pay into short term disability which I had and it had only cost me $1-2/paycheck. One young lady adamantly refused the idea and said that she was healthy and had no vision of herself ever needing it. I guess she never thought that she might be injured for life in a car accident or whatever. That short term insurance I had, paid out $10K NON-taxable money over the course of 6 months. I was sure glad to have it! That money meant that for that period of time we didn't have to tap any savings, etc. if I had had more in savings, it would preserved my accumulated wealth and could have at least let it grow for another 6 months untouched. Sometimes those little decisions we make can have negative or positive impact on our wealth accumulation and those that pass by all those opportunities by are going to be the ones that at the end of their life still wonder why they have nothing or not as much as they hoped.

[LivingAlmostLarge]

I agree short term and long term disability while you can buy it is essential. Sometimes though you are only covered by your employer and you can't buy more because of it.

[Nika]

There definitely should be a balance and enjoyment of life, but saving is essential. It gives some choices and security to the family.

People who have money do not live in Flint, Michigan, and if this happened in their town have at least an option to move (not having enough money should not be mean your children can are more likely to be poisoned, but in this world unfortunately there is a correlation). You can stay with your newborn for longer, you can go to a better specialist if you are sick, etc... savings mean options.

[Nika]

There definitely should be a balance and enjoyment of life, but saving is essential. It gives some choices and security to the family.

People who have money do not live in Flint, Michigan, and if this happened in their town have at least an option to move (not having enough money should not be mean your children can are more likely to be poisoned, but in this world unfortunately there is a correlation). You can stay home with your newborn for longer, you can go to a better specialist if you are sick, etc... savings mean options.

[Gailete]

Sometimes though you are only covered by your employer and you can't buy more because of it.

That is understandable if you can only have so much, but deliberately ignoring that benefit that is generally cheap to buy, I think when I was still working it ran about the price if not less of a cup of fancy coffee. If someone turns down short or long term disability and spends the equivilant on lottery tickets, they would have had a much bigger chance of 'winning' with the disability premiums. I think the stats are about 1 in 3 workers in the US will suffer a disability at some point in their lives and it doesn't have to be work related to collect. To have your regular income come in for up to 6 months or however long it lasts means you don't have to touch your savings at all during that time.

I think we all should save what we can and enjoy what we can afford.

Has anyone seen Life or Debt TV show? It is new, only 3 shows so far. My son has cable and tapes it and brings it over for me to watch with him while we laugh at these ridiculous people. One couple $300K in debt, hadn't paid on their mortage for almost 2 years and they got engaged and were planning on charging (since they had no money) around $12K on an engagement party! The host challenged them to have the party for $200 and they did, but you can see couples making bad decsions right and left. The worst is those that were making good money and then lost the job for whatever reason and just kept up the lifestyle basically thinking they deserved it. The newly engaged woman was still having a woman come to her house 2-3 times a week to do her makeup and beauty routines for $75 + tip. I sat watching that show absolutely flabergasted at these people. But watching it make me feel a whole lot better about my own financial situation and that's for sure. Ten years ago we had about zilch for savings after getting so sick and being unable to work and all the medical costs. Now we have some and some retirement money set aside. If I was oing to spend $12K it would be on the property taxes and propane prebuy (which costs a lot but saves us about $1000 a winter) etc. But even so with a limited amount coming in we can still get an occasional treat, such as a DQ treat a couple times a year, can't afford it more than that. But knowing you can have a limited amount of wants and treats makes you feel like you haven't given up everything. You just have to pick and choose what is the most important to you and know what you are savings towards.

[Nutria]

just kept up the lifestyle basically thinking they deserved it.

The pernicious evil of advertising.

.

[FLA]

So now I'm on SSD, and work an on line business as I'm able and hubby also works his business as he is able and let me tell you, we sure wish we had more accumulated, but I am very proud of the money I have managed to stash away over the past few years.

I still remember a discussion on another forum when I urged the folks that if possible to pay into short term disability which I had and it had only cost me $1-2/paycheck. One young lady adamantly refused the idea and said that she was healthy and had no vision of herself ever needing it. I guess she never thought that she might be injured for life in a car accident or whatever. That short term insurance I had, paid out $10K NON-taxable money over the course of 6 months. I was sure glad to have it! That money meant that for that period of time we didn't have to tap any savings, etc. if I had had more in savings, it would preserved my accumulated wealth and could have at least let it grow for another 6 months untouched. Sometimes those little decisions we make can have negative or positive impact on our wealth accumulation and those that pass by all those opportunities by are going to be the ones that at the end of their life still wonder why they have nothing or not as much as they hoped.

I just got SSDI and have heard about their programs that let you "practice working" for a while and you still get their benefits until it is clear you can carry on with a job. Is that a program you are doing because I am curious how it works out?

I also urge people to get long term disability since short term ends after what, 6 mos? I have a very crappy long term disability policy from work. I wish I had not overlooked the need to have a real policy outside of my employer. Especially if the percentage of workers who end up needing it is so high. I should've put less in retirement savings and used that money to buy an own-occupation LTD policy.