Pleasure-Purpose-Purchase, or Should I Buy This?

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“[H]appiness is experiences of pleasure and purpose over time.”
– Paul Dolan

Now that we know happiness can be quantified in numbers – (Read this first.) – I suddenly realized this was a massive breakthrough. In our last post, we applied a pleasure and purpose metric to activities to figure out how happy they were making us, but we missed the obvious: What if we applied the same pleasure and purpose metric to purchases? We’re a personal finance blog after all. It’d be stupid to not talk about money.

Anyway, I adopted this scoring system for any purchase over $10 I was considering. The first number is the pleasure I can expect from my purchase rated from 1-10, the second number is its anticipated purposefulness from 1-10, and the third bit is whether or not I bought it. Score anything you’ve recently wanted to buy accordingly! Recent pleasure-purpose-purchase scores for me have been stuff like:

Allergy medication: 4-9-Y
4-pack of rare beer: 7-5-Y
New Fitbit wristband: 6-2-N
All-you-can-eat sushi dinner: 7-4-Y
New audiobook: 6-3-N

In order for me to say yes to a purchase, my pleasure and purpose scores must add up to at least 10 out of 20. Otherwise, I put it back on the shelf. (For you, your score may be different. You might have something be 2-4-Y after mentally justifying it, and you might even set your purchase threshold at 8 out of 20 or lower.) Even now, this is stopping me from making purchases that won’t make me significantly happier. Look at what else I’ve been saying no to:

New 4K 55” TV: 6-2-N ($400)
Profoto A1 camera flash: 3-6-N ($1,000)
6-pack of craft beer I’ve tried before: 5-3-N ($15)
Food mill: 5-4-N ($45)

These are all things I want, but after scoring them all, I realized the money was better saved and invested. Besides, I already had a 50” TV and old flashes, which is why I ranked purpose relatively low. Let’s say I would’ve bought all that stuff this month were it not for the P-P-P score. I would’ve spent $1,460. Invested using the 10X rule, that’d be $14,600 by retirement in one month alone!

Can applying this scoring system to your discretionary spending save you tens of thousands of dollars? I think it will. Think about this and score your next few purchases, then comment below with your findings.

In the meantime, I’m gonna have some of that 7-5-Y beer. Mmm, unnecessary luxury…

I’ve Got Saving Money Down To A Tea

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Over the past few months, I’ve been making seriously big changes to my diet; not for health, but for my pocketbook. I accidentally got healthy in the process, but this isn’t about that. This is about my ongoing quest to reduce my annual food and drink costs by thousands.

Last October, I spent $1,314.54 on food and alcohol. Obviously, that’s ridic, so I tried to tone it down. By April 2017, I’d brought that down to $1,048.57 – $518.02 on food, $530.55 on alcohol. The fact I still spent more on alcohol than food was fucking bonkers though. I knew I could do better. I had to. Fast forward to now, and I’m tackling the booze budget. I think I can still have the good life AND spend only $300/month on drinks. Reluctantly, I started with evaluating why the fuck I drank so much in the first place. It wasn’t pretty.

I think I just like blowing money. On the cheap end, I guzzle bad beer without even thinking about it. On the high end, I internally justify things like my latest Mâcon-Lugny purchase by saying I like the artistry of good wine. Both situations brought me to the same conclusion: I like to feel rich, even when I’m not. This was a problem.

So what felt luxurious, but was still cheap? Soda? Juice? Coffee? Water? I booted soda and juice right away because I know the problems excess sugar can cause. Coffee was out because I don’t even like the taste. It’s utilitarian to me, and the sweet ones had the same sugar problem. Water was, well… water. It was useful, but I didn’t see the appeal. And that’s when my friend “A” popped in with a line that would save me tens of thousands in a lifetime: “Ooo! In summer we make cold brew tea, it’s really good! You just put a tea bag in a jug of water in the fridge and let it sit for a few hours (or overnight). Cold refreshing tea and it’s only a few cents per glass”.

Sold.

Just a few hours later, I’d hunted down my nearest Bulk Barn and found Earl Grey teabags for cheap. 40 teabags for <$3. I assumed at the time that’d account for 40 large jugs. Upon experimentation though, each 2L jug requires two teabags, meaning each teabag produces 1L. The math couldn’t be neater.

Basically, every time I drink a pint of tea (<4¢) instead of a pint of beer ($2+), I’m saving at least $1.96! Could the savings really be that simple? Could I really be adding $1.96 to my bottom line every time I drank tea? Maybe not exactly, but it was a step in the right direction! Believing in that $1.96 would motivate me to choose tea more often, and I’d see savings instantly!

Well, it’s now September 28, and I’ve had this experiment going for four solid weeks. Alcohol expenses so far? ONLY $408.94! That’s a noticeable improvement! Tea is helping me save ~$100/month! That’s ~$1,200/year! That’s ~$12,000 over 10 years! AHHHHH! WHY WASN’T I DOING THIS BEFORE?!?

A final note: tea’s goddamn delightful. I bought a small water bottle and carry teabags out with me now. Almost any establishment is willing to refill your water or give you ice, so it’s like free tea wherever you go. Hot or cold, it’s a great choice. Embrace tea and cut out more expensive drinks.

Anything more than 5¢/glass is too steep.

Let’s Check Back In With Our Artist Friend, or Why Inflation Sucks

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Those of you who have been following us for over a year might remember “A”, our mysterious artist friend who made only $700/month, but who also found a way to set herself up for a luxurious retirement in the future. When that article came out, some people were understandably pissed. It “isn’t applicable or attainable for everyone, and is really more based on fortune than hard work”, one reader said. Well, she’s not wrong. Living like we do isn’t attainable for anyone not willing to put in the work to optimize their lifestyle. And “hard work”? Please. Smart work is where it’s at, and being frugal is the result of a lot of that smart work.

“A” is still out there plugging away, and two things have happened since we last spoke with her: 1) She makes more now, and 2) some modest lifestyle inflation has crept in! Let’s take a look at her numbers.

A year later, her art is still her main source of income, but “A” is also knee-deep in side hustles. She now teaches art a few times a week, and professionally walks dogs on the side. Her monthly income is now $1,000. Rent is now $300, up from $200 last year. (She started making more, so felt it was only fair she contributed more to her household.) She eats well, though frugally. Her personal spending budget went up to $75 from last year’s $50. Her vacation fund is currently $100/month, and that all goes into planning future trips. As if that wasn’t enough, she also donates 10% of her income to charity – apparently, you don’t need to be a billionaire to pull a Jim Pattison – and somehow, through ALL THESE ADDED COSTS, she HASN’T tapped her $14,000 emergency fund, and she’s actually ADDED $5,000 to her savings and investments! With roughly $60,000 in the bank and her investments churning away at 7% return, she’s now on track to have $839,000+ by 65!

Now, for some people, this might all seem pretty extreme, but what if I told you a lot of math is actually working against her, and us as well? What if I told you WE SHOULD ALL BE SAVING LIKE THIS IF WE WANT TO RETIRE? Unfortunately, because inflation is a key concern for retirement, we should all be aiming for close to $1M in 30-40 years! (Here’s a post to help you with that.) Assuming an average of 2% inflation per year, “A’s” future $839,000 is worth only $387,000 of today’s buying power when she turns 65 in 2056! Because “A” is somewhat of a genius though, she’s accounted for this. Assuming even that she spends all $12,000 of her annual income to support her current lifestyle, her “$387,000” is enough for 65-year-old her to live on FOREVER as long as it’s invested in something generating just 3.1% interest, which could be a VERY real number for someone investing conservatively in old age! For “A”, the math checks out! For the rest of us, we need to save and be frugal AT LEAST as much as “A” is doing!

At 26, “A” has saved and invested enough that no further contributions are needed to support her lifestyle in old age. She could just blow all her work income until 2056, then sit back and relax. I want this for you too!

If you’re a millennial, you NEED to account for inflation in your retirement plan. Here’s a handy calculator. The reality is becoming a millionaire in our lifetimes is no longer an unattainable dream, but PRACTICALLY A REQUIREMENT to Retire For Good someday! How well prepared are you?

If you need help running your numbers, message us on our Facebook. We’re already helping followers plan for their future, and it’s a lot of fun for us! Seriously, we just want to help.

Is full-on retirement seeming unattainable now? It’s not the end of the world. In our next post, we break down MY plan for the future. I expect it to seriously annoy the naysayers.

Your Entertainment Budget Should Be Less Than $1/Day

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The average American household spends $2,482/year on Entertainment and consists of 2.5 people. We can then reasonably estimate the average North American spends about $1,000/year on Entertainment by themselves. This is less than optimal. I’m about to show you how to get by on $1/day and be more entertained than ever. If you’re 30, your savings from this could amount to $93,925.05 extra in your retirement account by the time you’re 65. (Ask me for the math on our Facebook and I’ll happily show you.) Ready? Let’s kill your Entertainment bill.

First up, no more cable TV. TV subscribers are dwindling, and that seems to be driving prices up: “The average TV subscriber’s monthly bill ticked up from $65.25 in 2014 to $66.08 in 2015.” It’s just getting worse. Meanwhile, Netflix humbly asks for only $8-$12/month depending on your package and offers you immediate commercial-free access to “3 years, 202 days, 12 hours and 14 minutes” of Entertainment. Now, I get that you’re never gonna marathon Paw Patrol, but that’s fucking unreal. If you sleep for 8 hours and work for 8 hours on weekdays AND watch every waking minute you’re free including weekends, you’re looking at 8.3 YEARS of Entertainment for, like, $8/month. Meanwhile, I’ve spent hundreds building my paid iTunes library, but Spotify memberships range from full-of-ads “Free” to $10/month, and they both offer 30 MILLION SONGS. If each of those songs is just three minutes long, that’s 171 YEARS OF MUSIC! IF YOU STARTED LISTENING IN 1846, YOU’D BE DONE NOW. I really don’t understand how paying for individual songs is still a thing. Streaming services are obviously the future. (I like to think most of you know this already.)

Netflix and Spotify together? Even if you paid the individual maximum, that’s $22/month, or $264/year. Wanna get even spendier? Burn your money with a PlayStation Now membership for $100/year and stream 500+ PS3 and PS4 games. That adds up to $364/year, or just under $1/day. It’s almost like I planned it.

If reading’s more your jam, use your local library. You’re already paying for it in taxes, so use it. It warms my little nerd heart to know millennials are using their local libraries more than any other generation. Keep it up.

What I don’t advocate though is piracy. If you’re stealing something, you don’t deserve it. I place a lot of value on art – especially movies – so don’t do it.

Finally, MAKE your own entertainment! Some of you roll things like dining out into your Entertainment budgets, but cooking at home is better. While you’re at it, learn to draw, or play the guitar, or pick up a camera and take pictures of every stray cat in the neighbourhood. I know too many people who can tell me every plot point of Breaking Bad, but when I ask them for the last time they went swimming in the ocean or hiking up a mountain, they draw a blank!

The point is $1/day on Entertainment is already first-world luxury at its finest. Your ancestors didn’t have screens and they did a lot more than just stare into a fire. Realistically, with libraries and nature, your Entertainment budget could actually be ZERO, but $1/day for everything I described above seems like a fair trade. Just don’t spend an ABSOLUTELY INSANE $1,000/year on Entertainment like everyone else. This family can buy one person’s groceries for half a year on that.

If You “Can’t Adult”, Stop Spending Like One

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Way back in 2000, I had an allowance of $5/day in early high school. I was supposed to buy lunch with it, but most of the time, I’d blow it all on a cup of overpriced coffee. Still, having no real savings to speak of and having no way to go into debt, I just kind of floated along in financial limbo. I only saw as far as my next cup of coffee, and The Bank of Mom & Dad ensured that would happen. My needs were looked after, and it’s not like I needed TWO cups of coffee in a day, so everything was good. For those few sweet years in high school, I didn’t need to worry about money. And you know what? I might want to return to that system as soon as next month.

No, I’m not going back to making daily withdrawals from The Bank of Mom & Dad. That’d be crazy talk. I’m frickin’ 28. No, what I’m doing is a sort of mental budgeting. Roommate “D” hit upon the idea recently when he withdrew a stack of $20s and made sure to only use one a day. Over a month, that’s only $600. If he wanted something that was $40, he’d have to go a day without spending anything. What he didn’t use could be carried over to the next day, and so on and so on. It was kinda brilliant. Going back to that allowance system made it so he never overstretched his budget, and when he ran out of money, he’d just stop. I NEEDED TO DO THAT TOO.

Obviously, this is nothing revolutionary. I was just happy to add one more tool to the financial toolkit. “D” reckons if he sticks to his allowance for June, his expenses should only be about $1,200 total, rent and all! Since I’m still having trouble getting below $1,500, this tool might be a godsend! I’m actually kind of excited for it because this restriction will force me to find low-cost, high-fun activities for entertainment, and that’ll help me for the rest of my life!

Can’t adult? Try going back to having an allowance. I know a lot of you are financially responsible enough that you don’t need this advice, but I also know some of you needed to hear this. Start with $20s for now, one a day, or adjust to your personal situation as needed. Maybe managing your money like a kid again is what you need to become a successful adult.

This Blog Cut My Monthly Spending by 42%

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Since I started writing Unconbentional in January 2016, I’ve had very open money conversations with friends. Every step of it has been a learning experience. As I did research for articles, I was often forced to run my own numbers and a lot of the time, they weren’t pretty. In some cases, the results called for immediate action. This post was a huge red flag. Even though I knew these weren’t healthy spending habits, spending $3,363.26/month was normal to me! Luckily, this blog saved my life. This is what I spent in April 2017.

Entertainment was a big deal to me back in 01/16, but I still thought I had control over it. $138.03 was reasonable, right? Unless it’s travel, NOPE. In 04/17, I spent only $33.54 on Entertainment that wasn’t Spotify or Netflix. (I don’t know why, but I tend to lump Spotify and Netflix into my Bills category. I consider them essentials.) In that $33.54 were two main purchases, and this is where it got interesting: I bought a $19.99 video game that I didn’t end up liking, and I bought a bunch of supplies to try CREATING a card game for $13.55. I spent half an hour on the video game, tops. Trying to create the card game took HOURS, and was a great night spent with geeky friends. In this case, the unconventional form of Entertainment clearly won out. Instead of consuming, try creating! It’s often the cheaper option, and far more rewarding!

Personal and credit card Debt cost me $161.55, and that’s the big red flag I’m dealing with now. I also included a Home category this time, which I didn’t have in 01/16. I spent $99.23 on stuff like cleaning supplies, toiletries, etc. Travel came to $158. That’s gas, and one super costly cab ride from a bar. Missing a bus really shouldn’t cost $46, but I guess cabbies need to eat too. Meanwhile, Bills are as expensive as ever, and I no longer have a girlfriend covering the cost. On top of that, I pay for Mom’s cell phone and use a stupid amount of data. My total for Bills came to $447.29. That’s phone, Internet, electricity, Spotify, Netflix, and a weird banking thing or two. That can’t be normal for two people living here, can it? What do you pay?

Finally, we’re at Food and Alcohol, and you know what? I’m fucking PROUD at how far I’ve come. I’ve started drinking less and eating healthier, AND I’ve made cooking at home the default option. Food costs came to $518.02 last month, and I think most of that was groceries. It’s not “A’s” $80/month, but we can’t all be as awesome as her. As for Alcohol, I’m way down too! For 01/16, it was $1,120.27! 04/17? Only $530.55, over 50% less!

I’ve still got a LOT of work to do – it’s stupid, for instance, that I still spend more on Alcohol than Food – but the total damage for April 2017 was a mere $1,948.18, DOWN FROM $3,363.26! That’s 42% less I’m spending EVERY MONTH.

I have no doubt starting this blog saved my life. Current goals involve trying to get down to $1,500/month. I’ll provide updates as I get closer, but hopefully, this will inspire you to see what cuts you can make in YOUR monthly spending.

For those of you who are new here, this is why I didn’t include Rent. (Yeah, I know I’m super fortunate.)

What do YOU spend in a month? What can I learn from YOU?

Thrifty Vegan vs. Spendy Omnivore

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This wasn’t even close. Obviously, I couldn’t have expected anything different seeing as how I was going up against our favourite artist “A”, but I didn’t realize how much work I needed to do until I saw her numbers. She can cover her three daily meals for the cost of my typical lunch! She doesn’t drink much either. Where I spent $1,340.83 this November on comestibles – $902.33 on food, $438.50 on alcohol – “A” averages $10/day if we don’t count eating out, and $12/day if we do. I guess this is normal spending? I have no idea because I have such a warped view of money. The rare occasions I make thousands in a day have largely destroyed any intelligent relationship I had with money. I need a fucking intervention.

“A” broke down her meals in way more detail than I expected. The following breakdowns are lifted directly from her email. Remember, she’s vegan, so she’s using things like almond milk instead of regular milk. Veggie burgers and beefless ground make appearances too. Here’s a typical breakfast:

Pancakes
     PancakeMix    $2.50/box  0.42
     Almond Milk 0.67
     Vegetable Oil  0.20
     Maple Syrup   $10?/1L 0.70
      Meal cost: $1.99

In case you’re wondering, I picked the most expensive of the three breakfasts she sent me. Cereal runs her $1.33/meal and oatmeal is $1.20/meal.

A typical lunch might be a veggie stirfry and rice:

Veggie StirFry and Rice
     Various veggies $0.75 (if you’re keen on saving money you can try to get the cheapest in-season ones and/or work in frozen veggies)
     Gardein Beefless Ground   $4.60bag/4   $1.15
     Garlic 0.20
     Olive or Vegetable Oil 0.10
     Soy Sauce 0.10
     Sriracha 0.10
     Rice   $20 for a big bag  (individual serving – 0.10??)
     Meal cost: $2.50

Dinner could be something like pasta:

Pasta
     Spaghetti   $10 / 4.2kg   49 suggested servings. probably 25 real servings     0.40
     Gardein Beefless Ground (1/3 pack) – $1.55
     Vegetable Oil  0.20
     Pasta Sauce 7.99 for 1.75Lx2   0.79
     Frozen veggies $10 for 2kg   0.75
     Garlic .10
     Meal cost: $3.79

Miscellaneous snack and drink costs bring the daily average from ~$8.28 to about $10/day. Also, as “A” wrote in her email to me:

I usually only eat out maybe twice a month, usually for a social event or date night so that tends to come out of my fun money budget not my grocery budget. A meal out might be $15-$30.

Factoring in everything above and even assuming she spends on the high end of her restaurant budget, “A” spends only $360/month on edibles. I’M FUCKING EMBARRASSED. I SPEND MORE THAN THAT PER MONTH ON ALCOHOL ALONE.

My food costs are insane too. Even my “most frugal” meals tend to be things like ham sandwiches from Subway for $7, or phở for $10. Then, there’s my cooking habit where I make ambitious meals once a week. Take a look at the shit I’ve been doing lately:

WEEK 6 – Roast rack of lamb persillade, garlic asparagus and buttered orzo
WEEK 7 – Ratatouille, lemon basil orzo and bok choy
WEEK 8 – Rotisserie-style roast chicken and quinoa tabbouleh
WEEK 9 – Cantonese lobster, dongpo pork, bok choy and rice
WEEK 10 – Lobster linguine and arugula salad

I BOUGHT THREE FUCKING LOBSTERS LAST MONTH. No wonder I’m in so much debt

In November, I spent $30.08/day on food alone. Including alcohol, that’s $44.69/day. I sincerely hope you’re nowhere near that. I’m definitely backsliding into full-blown idiocy.

In the end, as embarrassing as this exercise was, I’m glad I put in the work to add it all up. If I adopted all the same eating habits as “A” and ate for $32.69 less per day, I could save $980.70/month, or $11,768.40/year! Wanna see something truly scary? If I invested that every year from now until I turn 65 and got 7% annually like I usually do, I’D HAVE $2,018,998.71 IN MY BANK ACCOUNT. I’m literally fucking lightheaded right now. Less lobster, more millions. I’m eating myself out of a decent retirement.

The absolutely crazy thing is a lot of you reading this are eating for less per day than even “A”. $12/day is pretty luxurious, and here I am eating like a goddamn emperor. I can’t even justify what I’ve been doing lately. I’m floored right now because I hadn’t even added this up until I started researching this article.

I’m seriously fucking embarrassed, guys. Learn from my mistakes. Make me feel even worse by telling us YOUR food costs on Facebook.

What I Spend In a Month (Apparently)

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In our previous spending breakdown, “Why I Am A Fraud: A Story of Booze and Strippers”, I listed off all the dumb crap I spent money on in January 2016. It was a mess. $138.03 on entertainment was okay, but $229 on cabs? $651.08 on food? $1,120.27 ON ALCOHOL?!? Clearly, my spending needed a serious intervention. It took all the way until now to strip away my more harmful spending habits, but I’m still no saint. Reluctantly, here’s October 2016.

It turns out I eat a lot. My food spending was nearly identical to January, coming in at $651.96. I ate out less, but I splurge on ingredients when I cook, even when I’m feeding other people. One home-cooked meal cost me $72.63! Pan-seared cod puttanesca for five was EXPENSIVE. I was able to put a cap on entertainment though. I paid $10 cover to get into a shitty bar, and I bought two books and a single lotto ticket. Total for entertainment: $31.29. Travel costs were far less too. $174, and that covered driving, transit, and cabs. My bills are high though. I pay $89.49 to get online, and between my mother and I, our phone bill – which I pay – came to $299.74 because she was roaming in China. As usual, no rent costs for me after my roommate pays his share, and aside from debt payments and Netflix, all that’s left is… ALCOHOL. Any guesses? I’ll wait.

Ready?

Alcohol for October 2016 came to…

$662.58, ROUGHLY 59% WHAT I SPENT ON BOOZE IN JANUARY! I CUT MY ALCOHOL INTAKE BY OVER A THIRD!

Obviously, $662.58 is still bonkers. $21.37 a day for booze is crazy to a normal person. My aim is to have alcohol down to $500/month. Maybe then, I can finally start whittling down my debt.

In total, I went through $2,803 in October. $633.62 of that went toward housing, but was reimbursed by my roommate paying his rent. $100 came back to me from my mom because she felt bad about her roaming charges. Factoring all that in, I spent just over $2,000 on my own. I’m not happy with that number yet. I want to get down to $1,500/month.

I made $3,105 in October from all my sources of income. I sold some stuff, worked my liquor store job, and actually didn’t take any money for myself out of my photo business. I came out ahead this month! That’s how it should be EVERY month!

Anyway, here’s hoping I don’t backslide. I’m pumped my alcohol spending is so far down though.

Comments? Questions? Ask me on Facebook.

You Don’t Have To Live Alone

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Vancouver’s average price for a 2-bedroom unit is $1,345/month, and that ridiculous price doesn’t even go away once you leave city limits. I live in nearby Richmond and my place would hit the market at $1,400. Experts recommend budgeting 30% of your income for housing costs, so let’s figure out how much you’d need to earn to meet that criteria… HOLY SHIT, ARE YOU KIDDING ME? $4,483.33?!? I make that much, but I’m a special case. I have other sources of income, and I have 2.5 jobs. I also – since I’m not as dumb as I look – live with two other people and their combined rent is $950.43! With that, ALL my housing bills are covered and I HAVE ZERO RENT. I make sure my living costs are as low as possible, and I’ll show you how to do that too.

More info on my living situation here.

*****

“What’s your current rent and how many people are you living with?”

I was messaging Ben about his new living situation. He’d been in New York for a few months now, and I knew he’d upgraded a few things in his lifestyle. It’s weird to think he’d probably hit FI by 31 or 32 if he’d stayed just as frugal as before. I tried not to think about my debt. He messaged back.

“$1,400, and I live with one other person. There’s definitely cheaper places, but it’s a pretty nice apartment in Park Slope (Brooklyn), and a pretty nice area. Almost double the $750 I was paying in Vancouver.”

“$1,400 and that’s all you?” I asked.

“Yeah, it’s $2,800 total.”

I probed a little more and estimated his place to be about 800 square feet. This was a different world to me. Two-bedroom apartments in New York go for an average of $3,631. Ben had upgraded his lifestyle, but he still found a way to get a deal. Good for him.

Meanwhile, I started messaging one of my artist friends.

“Quick! I need rent numbers for an article!” I said.

“Me personally 200 but that’s cause the people I’m living with are cutting me some slack,” she typed back.

I probed a little more. She was living with her boyfriend in his parents’ home and had a room to herself. Not bad. My girlfriend pays $316.81 and shares a room with me.

Okay, I had what I needed.

*****

I don’t know why, but many 20- and 30-somethings regard living alone as some sort of achievement. When questioned about it, they’ll often say something like “I hate living with roommates”. Uh, maybe screen your fucking roommates and take the initiative to cut ties if a roommate relationship becomes toxic? I get it’s not always easy, BUT NEITHER IS PAYING $2,800 IN RENT ON YOUR OWN. I’ve been dumped as a roommate before, and it sucked, but making the decision to share your living expenses with ANYONE YOU CAN LIVE WELL WITH is a time investment worth making.

If I wanted it, my place could be just me and my girlfriend. I’d lose $633.62 in rent from my roommate though. That’s $7,603.44/year. WHY WOULD I DO THAT? In fact, we love that silly bastard. He cooks and cleans, and it’s honestly nice having someone else in the place while either my girlfriend or I are off at work. We’re not the only couple that has an extra roommate either. For a brief period, S&D were paying $1,800 for an 1,800-square-foot house, and they brought on a roommate at $550/month, or $6,600/year. That’s nothing to sneeze at. A hypothetical person paying New York prices at $2,800/month by himself is crazy by comparison! This proud idiot is throwing away $33,600/year, which is more than a lot of us millennials make! I LIVE FOR FREE. MY ARTIST FRIEND LIVES FOR $2,400. MY GIRLFRIEND LIVES FOR $3,801.72. Even working with the last figure, my girlfriend theoretically comes out $29,798.28/year ahead of this NYC guy who dislikes roommates. Know what happens if you put that money in a 7% investment every year from the time you’re 40-65? OVER TWO MILLION FUCKING DOLLARS.

I encourage everyone to have a roommate, even if you don’t “need” one. Crunch some numbers, and you’ll realize you need one more than you thought. Besides, living with people at any stage of your life is actually good for you. Living alone increases risk of death.

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Veblen Goods and Conspicuous Consumption

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In 1899, an American economist named Thorstein Veblen wrote a book called “The Theory of the Leisure Class”. In it, he describes the phenomenon of Conspicuous Consumption, and explains how trying to earn social status through material goods can make for poor buying decisions. This idea became so prominent that modern economists now refer to luxury items as Veblen goods. Basically, Veblen goods are average items marketed at a high price point to prey on The Rich, and The Rich fall for it every damn time. Demand actually increases as the price increases. Examples include Hermes handbags, any Rolls Royce vehicle, and artwork by Christopher Wool. Seriously, have you seen that guy’s “art”? It makes me angry every time (so I guess he must be doing SOMETHING right).

Now that you know this, you can probably sell your Rolex and start ignoring Michelin stars. The entire luxury goods market is aimed at insecure people who have money, but little faith in their social status. They need to SHOW they have money. Think of it as a tax they pay to impress people. What really boggles my mind is there’s zero financial gain from having luxury goods. I suppose you could theoretically say driving a Maserati Quattroporte when you’re a real estate agent could help land higher-level sales, but by then, YOU’VE ALREADY SPENT $115,825. For the other 99.9% of us, expensive cars are bullshit when you can get from A to B in a decent $4,500 commuter car. You’ll rarely hit 100 MPH on city roads anyway, and if you do, enjoy your traffic tickets. I say it’s lose-lose. Had you invested your $115,825 at 35 and let it sit until 65 at 5%, you’d have HALF A MILLION. One shitty luxury decision can ruin your retirement.

So am I saying you should have ZERO luxury goods? No, not exactly. I’m just saying you should look at a product’s practicality before its brand name. Don’t spend $1,200 on a handbag that does the same job as a 0.1¢ plastic bag. Don’t buy a 1961 Cheval Blanc just because you saw it in a movie when you like Barefoot. Don’t spend $500 at a ritzy restaurant and walk away hungry. There’s spending on things that are worth it, and then there are Veblen goods. I actually smirk a bit when I see people showing off their expensive cars now. In many cases, I know they’re financing them, and I can’t help but picture them stuck in traffic behind a Smart car while cyclists blissfully pass them in the bike lane. Everyone these days seems to own a luxury car, but how many can escape 40 hours a week making someone else rich?

Once you pay that much money for something, you also start to lose leverage when you’re dissatisfied. I dined at a two-Michelin-star restaurant in Paris once, and dropped $600+ for the privilege. My fish was unevenly cooked, my sommelier was oddly passive-aggressive, and they deliberately seated me in a corner away from their more opulent clientele. I could’ve complained, but what’s the point? I’m sure their staff regarded me as a commoner anyway, looking to milk an upper class establishment for all they were worth. It’s a different kind of club up there, and it’s not worth trying to get in. I’m still not sure why I tried.

Finally, Veblen goods are particularly dangerous to the faux riche, and I willingly admit I fall into that category. At my current level of Debt, I shouldn’t be buying ANYTHING except basics, but here we are. I have an Apple computer, bottles of $400 Bordeaux in my cellar, and enough PlayStations to run an arcade. That’s why, right now, I pledge to spend only $100/month on material goods. I’ll roll that limit forward if I have any left over, but that means only blowing $600 on material goods between now and Christmas. Bug me and make sure I post updates. With some luck, maybe I can be Rich for real.