Living Below Your Means (was...)

From: James Rogers (
Date: Mon Jun 05 2000 - 11:18:51 MDT

On Mon, 05 Jun 2000, Brian D Williams wrote:
> I have undertaken a LBYM (live below your means) lifestyle for the
> last several months, and would like to sing it's praises.
> I recently finished Thomas Stanley's "The Millionare Next Door" and
> "The Millionare Mind". Both books deal with his extensive research
> on millionares, who they are and how they got there. His main point
> is that the vast majority got there in this lifetime, on their own.
> They stay married to the same person for life, and they are very
> pragmatic about spending money. They are not at all what we have
> come to expect via the media.

I strongly recommend reading both of these books. These books are as
important, if not more, than similar types of books on investing. They
offer extraordinarily valuable insight into what factors actually account
for why some people becine wealthy and some do not. Most people don't realize that rampant consumerism
nickel-and-dimes them into a state of chronic non-affluence, never mind
the detrimental effects it can have on mind and body.

Coincidentally, I finished "The Millionaire Mind" yesterday (inflight
reading material for a trip I returned from yesterday). I also found it
interesting how much the average millionaire lifestyle actually deviates
from the image held by most people. I'd previously read other articles by
T. Stanley and have generally been impressed with his research. I was
also happy to see that my lifestyle fits the profile relatively well
(though I am not a millionaire, I hope to be), which is admittedly why I
bought the book in the first place -- lifestyle improvement.

After trying other lifestyles on for size, I pretty much made a long-term
commitment to the LBYM lifestyle, largely because it offers so many
benefits in addition to wealth building (like reduced stress) with very few
consequences. In fact, there are a lot of things about cheap lifestyles
that are generally superior to high consumption ones.

I have lived below my means for some time, largely because I've developed
cheap lifestyle habits as a consequence of being poor for so many years.
Over the years, I *have* noticed a difference between myself and my
friends, most of whom tend to support a consumption heavy lifestyle -- it
is something we even talk about on occasion. While the durable goods I
buy do tend to be relatively expensive on average (I tend to pay for
quality), I rarely buy things and I don't actually have that much stuff (my
house is quite empty). Most of the things I enjoy doing are cheap or
free; I tend not to spend money on consumables and things that don't retain
their value with few exceptions. The net result is that while most of my
friends are in the same general income situation as me, I have started to
noticeably separate from the pack in terms of total assets. In fact, I
haven't sacrificed anything because I generally have as much "nice stuff"
as they do, I just financed it differently, more carefully, and am
generally patient when making capital purchases.

Anyhow, in the last 6 months or so I have re-doubled my efforts to be
economically efficient and have managed to do pretty well at reducing the
expenses of my household without any loss in quality of life. I think
that our expenses are currently at around 35-40% of our take-home
income, including expenses such as mortgages, rent, and
similar. Most of the rest gets invested in stocks and maybe real estate.
Investment appreciation aside, it is amazing how fast one can accumulate
money simply through aggressive saving. The biggest savings have come
from eliminating debt and leading a cash driven lifestyle (something easy
to do when you spend considerably less than your income). Heavy use of
credit can have enormous negative consequences on long-term wealth

Living below your means is a good topic.

-James Rogers

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