No Point Making Money If You Don’t Spend Your Money

Vacation Property

There is no point making money if you don't spend it all. If you die with too much money, that means you wasted a lot of energy, time, and nerves. You could have just relaxed more and enjoyed life!

Imagine you're a financially successful 35 year old professional making $250,000 a year.  You're still $130,000 short from being in the top 1%. But by any other metric, you're doing just dandy. 

Yet, instead of living a comfortable life, you live like a pauper, renting the same dumpy one bedroom since you were 25. For wheels, you drive a 2002 Toyota Corolla and for vacation, you always stay domestic, never wanting to see the world.  Everything you do, or don't do rather, is because you want to save money.

Some of you may think this is a great way to live, as certainly you'll be saving a boat load of cash for retirement. I say there's absolutely no point making that kind of money if you are going to live so frugally. 

The Opportunities To Make Lots Of Money

Six figure jobs are a dime a dozen, but generally come with higher stress. As such, you might as well just make a fraction and lead a carefree life if you never plan to spend your earnings.

Watching the zeros grow in your bank account is a very empty feeling after a certain point. It might boost your self-esteem to tell your friends how much you have, but that's just shallow.

Cash is only a medium of exchange, and a means to provide a better life. If you aren't utilizing your cash, then you are wasting your time.

Hoarding Money Like A Disaster Is Always Around The Corner

There's a fine line between being smart with your finances and being overly frugal. Let's say you've always wanted to buy that second-hand $30,000 Porsche in your 30s and your gross income is 10X that amount. 

Instead of buying what you want, you get a $8,000 Toyota Corolla to save money in your 30s. Well after 10 years, guess what? You're in your 40s and the novelty has worn off. You're just another 40-something year old knuckle-head going through a midlife crisis.

The best time to own the nicest car you can afford is when you have kids. You want the safest car possible to protect them in case of an accident. God forbid something were to ever happen to them, you would be willing to pay ANYTHING to save your children.

Spend More Luxuriously On Your Home

Comfortable shelter is the same thing. The rental stock is generally inferior to the ownership stock. Due to rent control, many landlords haven't updated their apartments in years. 

Sure, you may be saving money renting your same 1 bedroom in your 30s as in your 20s. But you're also crimping your lifestyle if you can afford to buy or rent a two bedroom or three bedroom apartment or home.

The best time to own the nicest home you can afford is when you have children. Therefore, when it comes to spending, try to spend it up. Who knows, your home might actually appreciate in value over time!

I'm currently in the process of upgrading homes again. However, my wife isn't a fan. Here are some risks of upgrading homes nobody really thinks about.

You're going to be middle-aged and feel proud of yourself for saving X amount of dollars. Meanwhile, someone who spent what they could afford has been living a much better lifestyle for the same time period.

Therefore, everyone must eventually choose a decumulation age and start spending more. There really is no point making so much money and dying with millions. This means you wasted a lot of time, energy, and stress during your younger years chasing money.

Spend More Money On Living Better

One of the reasons why the housing market is so hot is because we're all spending a lot more time at home. Therefore, the more time we spend at home, the more we appreciate our homes and want a nicer home.

During the pandemic, people have clearly realized there's no point making money if you don't spend your money on nicer things. If there's ever a time to spend more for a better life, it's during a pandemic.

Great vacations are priceless because of the everlasting memories they provide.  Instead of flying off to Greece, you decide to experience your 3rd staycation in a row to save money. 

Meanwhile, you're getting older and you're no longer as nimble as you once were to hike those great mountains.  It's harder for you to sit comfortably on an airplane for longer than 3 hours because of deep vein thrombosis and numbness in your legs. 

Now, what's better?  Living a better lifestyle that you can fully afford, or saving an extra buck or two?

Related: Practice Taking Profits To Pay For A Better Life

Life Is Finite, Please Don't Die With Too Much Money

Most of us who are educated and who work hard are going to die with TOO MUCH money in our bank accounts. I know retirees who have great pensions with no mortgage and very little expenses still try and save as much money as they can. 

Well guess what? That's kind of counterproductive, because saving money while you are retired is like saving money to spend in death.

I'm likely saving too much money by putting away 70% of my after tax income. It's been instilled in me ever since I got my first crappy job at McDonald's to save the majority of money and not spend. 

Spending Money Is Still Hard For Me To Do

It's very hard for me to spend more, largely because I feel I have everything I need.  It would be nice to have an ocean view vacation home in the South of France. But that seems like just too much hassle. 

The only thing I'm thinking of purchasing is new car in 2025 once my car turns 10 years old. As a father to two young children, a safe car is paramount. My Range Rover Sport has been good to me since December 2016. I'm excited to get a new one!

After maxing out your 401K and IRA and then saving 20% of your disposable income after retirement contribution, I say we should spend guilt-free the remainder on whatever we darn please. If we try our best and fail at spending all our disposable income on living life, then saving the rest isn't so bad.

Please repeat after me. There's no point making money if you don't spend your money. Revenge spend to your hearts delight. Buy things with your tremendous investment gains since the pandemic began.

If there's ever a time to use money to improve the quality of your life, it's now!

Spending Money Aggressively Now In Middle Age

In 4Q 2023, I decided to follow my advice and buy a luxury home for my family. I think spending money on a place you spend over 18 hours a day using is a good use of funds. The home had been listed in 2022 for a million dollars more, taken off the market, and then re-listed in 2023 for less. I figured now was the time.

The downside is that I'm no longer financially independent and have to go back to work! But I won't go back to full-time work. Instead, I will go back to part-time work once my daughter goes to school full-time. She's four now.

It felt weird selling stocks to buy a much larger home. I also felt nervous not having the same amount of liquidity as before. But you know what? There's no point making money if you don't spend it. I don't think I'll regret my decision several years from now.

Related: Retire By A Certain Age, Not By A Certain Financial Figure

Here are some resources for a better life.

1) Manage Your Finances In One Place

The best way to build wealth is to get a handle on your finances by signing up with Empower. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize.

Before Empower, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Empower to see how my stock accounts are doing, how my net worth is progressing, and where I’m spending my money.

The best feature is their 401K Fee Analyzer which is saving me over $1,700+ a year in portfolio fees I didn’t know I was paying.

Finally, run your finances through their free Retirement Planning Calculator. They use your real input to output realistic retirement numbers. You want to have an above average net worth for your age so you can have more options and live a better life.

Planning for retirement when paying for private grade school
Are you on the right retirement path?

2) Negotiate A Severance Package

Never quit your job, get laid off instead if you want to move on. Negotiating a severance package provided me with six years worth of living expenses to help me focus on my online media business.

Check out my book, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye. The book provides solid strategies for how you too, can escape a job you hate with money in your pocket.

Both my wife and I negotiated a severance package from our jobs at 34 years old. Since then, we've been able to travel the world and live more free. We also became parents to two children. It has been a blessing to negotiate a severance and walk away from our jobs with money in our bank accounts.

3) Invest In Real Estate For Passive Income

One of the ways to live a better life is to always have enough passive investment income. This way, you don't have to spend time working because your investments are doing the legwork for you.

Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile, provides utility, and generates income.

Fundrise is my favorite online real estate investing platform because it was founded in 2012 and focuses on heartland real estate. Heartland real estate, or Sunbelt real estate, has lower valuations and higher cap rates. Fundrise offers many diversified and managed funds for you to choose from.

Take a look at CrowdStreet, one of the leading real estate crowdfunding platforms today. CrowdStreet focuses on individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.

For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience. 

114 thoughts on “No Point Making Money If You Don’t Spend Your Money”

  1. john Osborne

    WTF are you supposed to do with it. I was going to just quit my job 10 years before retirement age, but mentioned it to my mother who thought it was a bad idea and convinced me not to. I was going to buy a nice new apartment to upgrade from the one bedroom in a plain 1950s building I bought a third of a century ago, where some MF built a wall maybe 30 feet from all my windows, but in every single direction, unless I look straight down at the ground a few stories below. I stopped going hiking on weekends decades ago when my father asked me what the train fare was, then laughed at me when I told him. I can’t go anywhere, because my mother doesn’t go pout by herself anymore, and only for doctors appointments. I have enough clothes, and despise the shit small monopolist supermarket left after the others, and all the health food stores, where I would prefer to shop, and all the produce stores were pushed out by landlords jacking up rents so only chain drug stores, banks and nail salons can afford it. So, there isn’t even a place that I want to spend anything on groceries left. What the f are you supposed to do with it so you don’t die? Burn it?

  2. Great article but I almost 100% disagree. I am 34 making around $300k and I rent one bedroom. Exactly like you described. And I only spend money on something I really really need. Don’t get me wrong. I am not going to live in the hole with roaches and rates. My $2500/month new 1BD is great and I rent it. I don’t need more. I don’t need a car. I prefer to walk and it’s free. I don’t eat a lot. I like to travel, however I will find the cheapest option booking far in advance with flexible dates. So I spend 35% of my net income. 65% I always save – it’s a must. And I love seeing over half a million bucks in my accounts. It gives energy and confidence in tomorrow. This is a great feeling. Something that’s difficult to describe. Believe me or not it makes me sleep better at night. I don’t need luxury stuff. Instead I would prefer more savings.

  3. Very important indeed, you can’t take your money to your grave. The queen of England just found out

  4. Vacationing domestically makes sense if it genuinely brings you happiness. “Seeing the world” is overrated; everything looks the same everywhere, for the most part, and humans are humans. You can spend plenty of money in your own home city/country. Other than that, you’re absolutely right. Becoming rich is hard; reward yourself for it, however makes you happiest.

  5. Lots of people save excessively not because they want to most about it or watch their bank account increase, they live out of fear. For example, a medical condition they have that could bankrupt them in the future, or having lots of potential dependents in the future.

    With the state of medical care in many countries, this is sadly not a completely irrational fear.

  6. Here is one thing that I would love to do. Save enough money for retirement (obviously) and make sure that when my time comes I have enough left to help my loving family.

    1. I have experience from both sides of the spectrum. My mom is one that never does anything that costs money, lives on her parents property so she doesn’t have to pay rent or property tax, and eats cheap/low quality food. She always brags about how much money she has and how her costs of living is so low.

      I agree with a commenter below about spending money on your kids. If the parents always work yet never take vacations or spend time with the kids, the kids will never really know their parents. If you do put work over your family, then you should have never gotten married or had kids in the first place.

      Now, spending money on kids doesn’t mean trips to Italy. Heck, take them camping. Kids don’t care what they do as long as they can do it with you. They are not going to say “this is lame, I wish I was at Disneyland,” if you start the family off going camping. If you decide to take trips when they’re older, they’ve already be used to staying at home so they won’t want to do anything.

      DONT RENT, BUY A HOUSE. And here’s the reason. In 2020, house values are going up roughly 10-15% a year, year over year, which is a pretty good return for retirement.

      In summary, Save some for retirement but get a nice house in a good/safe location and spend the rest on the family. This will create a family bond that lasts well after they leave the house. Once the kids leave, then you can funnel the extra money into your retirement account. Additionally, you have a house that you lived in for 20+ years that appreciated upward at 15%. So as you can see, you spent time with the family and you still have enough money for retirement.

  7. Whether or not the advice given is smart, let me just point out that there aren’t too many oceans on the southern side of France.

      1. Geography. There are zero oceans on the southern part of France. Southwest and West yes. North no. East no.

        1. The Mediterranean is in the south of France – Cannes, Nice, Marseilles, etc. Technically the Med is a sea, not an ocean, but you’re just being a jerk to call someone on that.

  8. If you have kids, consider them to be what you spend money on. Forget the big house, cars, boats etc. Live simply when you have kids so you can spend as much time with them as possible while they’re young. If you don’t, you’ll be wishing on your death bed that you had, and you won’t care at all about the money you have.

  9. I – in no way match any of the levels of income etc that is mentioned in the post. However, my concerns and fears and self crazy-making on this subject are really messing with my life and my health. I’m in my early 60’s. I have worked since I was 14 like most in my age space. I lost a husband and inherited a fair amount. I never stopped working. I worked a special event while he was in the funeral parlor. I was so afraid. My parents were $10 over the bracket to get any federal assistance so I helped support them. Mother died while hording cans of garbonzo beans – depression baby syndrome. It has been loss after loss and worry after worry. I can’t let it go or make any sense of any of it. I cant really articulate in the post the intricacies of how I manage things…but I work any job and make between $100 per hour to $15 per hour never willing to turn down work. But I’m tired. My weakness is my love of my home and it is very nice and is my source or joy along with my pets. My worry is to be destitute at the end I guess. I’ve just seen to much of that and it haunts me.

  10. Late comment for an old post but I just recently found your blog. Love this post as I am struggling right now with this very concept.

    I lived frugally in college, med school, specialty residency, and for the past 8 years after finishing. My wife has been a SAHM for the last 6 years and my income for the first 4 years were 200-250k. Only recently has it spiked up to about 700-800k after I became a partner. In the past 8 years, we have paid off approx 525k in student loans. We have a net worth of approx 3m and our retirement portfolio is about 2m. My income for 2015 should be right about 950k yet I cannot convince myself to trade in my 2001 civic with 190k miles for a nicer used Lexus/Acura that I can purchase for 25k. I love cars yet I have been saving for so long now I feel guilty for spending money on anything that is not absolutely necessary. It is a terrible place to be.

    1. Wow! Amazing how your income has ramped to high!

      If it makes you feel better, I finally traded in my 14 year old Land Rover for a sexy new Honda Fit! It costs $20,800 out the door, and way more than my old car, but it’s still under my 1/10th rule for car buying, and I LOVE it.

      I’ve slowly learned to spend more of my wealth. Perhaps set aside every year 1%-5% of your income to just blow while maintaining a large savings rate. Cheers

      1. Wow – personal response from the man himself, I am honored!

        Thank you for your kind words. My income has hit a peak as our specialty is slowly being dragged down by the insurance companies/hospitals. I will be more than happy to remain in the 500-600k category in the next few years (if our group doesnt get bought out by a hospital) if things go well. I just worked a ton of extra shifts this year – hence the spike in income.

        Bottom line – I seriously love this post and your reasoning as it has really helped me put things in perspective (btw – I have no idea how you saved 70% – wow!). I am almost 40, have 2 little ones, and I have worked non stop with zero vacations so far. Having said this, I will be purchasing a new car this month and plan that vacation my wife has always asked for. Life is short, gotta live it sometimes I suppose.

  11. I think the comment above is good “a frugal person knows their priorities and looks to save on the less important stuff, but spends more freely on the truly important things.”

    You know, since my last post in October (almost a year ago), I have gotten much better at spending money. :) My husband and me have started going out to movies, gigs, plays etc at night time and getting a babysitter for our son. I have employed a house cleaner which is probably the thing that has made the biggest difference. It makes me happy too, to help someone who needs a job. We are eating nice cuts of meat now. Plus I have planned some dream family holidays – one of them is a 5 day cycle trip where the organisers carry our bags from accommodation to accommodation. Plus I am giving some money to helping younger family members who are unemployed and on the bones of their bum in South Africa.

    I think this is a great post – it won’t suit everyone as Lucky P and STC have said (5% or less of people have a lot of discretionary income) – but I have appreciated hearing peoples views and discussing these things with others who are in the same boat. Cheers !!!

  12. I totally admit, i liked the title of your writing…If i make 300K/yr, I am willing to spend 100 K as long as I can save atleast 50%….BUT 300 K is way too much than what i make… watever i make, i like to save 2.5K but somehow there are unseen expenses, eat outs, buying stuffs, upgrading your gadgets etc and so on that its really hard to even save 30%…And vacations and buying the car i love is just a dream unless I start saving 70% and live in a low profile for few years??

    I think your article suits to people who already make good money, settled down or own a business on auto pilot …. and having no worries, if then YES i would spend up to $120 K a year LOL

  13. It seems all your scenarios start or are based on wildly high income and investment success.

    If you are 35yo and making over $250k you’re not dealing with issues of progressive income required to survive, you have plenty of discretionary income to spend with low risk to your future. Half that to even 100-125k in high cost of living cities on the coast and you may be comfortable but probably not enough room in an aggressive saving budget for wealth and retirement to purchase a sports car for 30k…. Further the average income is more like $50-80k with slow increases for inflation.

    Similarly your investment and tax advice include assumptions that infer $3M+ in investments (30k in CDs and 25k interest sounds great but most people are lucky to have a ten of that invested based on average wages and investment potential) creating passive income well above that amassed by 20-30 something’s and not possible if they are not saving every discretionary dollar possible vs buying non-essential large purchases like an expensive old high maintenance car.

    If every reader made $250k steady income before they were 35 and had amasses over $3-5M in wealth then they most likely would not be reading this web page which describes wonderful pipe dream goals but is wrought with unreasonable inflation for the mechanics to work out as ideally as you describe.

    I understand this is simply an enticing site to lead readers to your web partners but please attempt to scale the article assumptions to match something plausible to 50% vs. 5% of the population.


  14. Good to read all these comments. I have always scrimped. But over the last 3 years, my husband and I started a business *we are 50yrs old) and are now making $300K p.a. after tax, which is alot of money, we have also paid off our mortgage. We have a huge garden and I would like some help but to date we have been paying students at $15 phr or having free help from travellers in exchange for board. Now I am thinking of getting a gardener as we have a very large garden, but his rates are $40 p/hr adding up to $350 per day. Obviously we can afford it, but I am really struggling with the concept, because we have always been DIY people, and you know, it seems so indulgent and expensive to employ a gardener when I could be doing it myself… So while our income has tripled, we pretty much are living in a similar way, with me looking for the cheap cuts of meat, cheap grocery products, $10 bottles of wine etc; it’s really hard to increase spending after a lifetime of being so careful with money. Now we have upgraded to takeaways once a week, when before it was once a month. Still, obviously we can afford a nice restaurant meal – but it’s really quite difficult to change a mindset ! Unfortunately, it’s not something I can talk about with friends; no one would sympathise !!!!!!!

  15. I agree that yes you should enjoy it, but like others said there is a balance. I will continue to save, invest and do all the right things and keep learning about money.

    The right thing to do is if you want to take that 15 thousand dollar safari trip of example. Set aside some money for it every pay check. If your earning 100k plus its probably not hard to do. But if it takes you 2 or 3 years to save for it and then go on that vacation its not that bad as you still have contributed to all your retirement accounts first.

    But say your expenses are way too high or your earning way too little, then yes you need to consider things. You can enjoy things but you may be limited to what you can actually do. Bottom line could be you may need to simply earn more money to enjoy new things in life.

    I also think people hoard money because of that’s how they grew up. They started making little and did everything they could to save every dollar. But when incomes grew people still have those old habits in them that hold them back.

  16. What about a strategy of “splitting” raises? Half to increased savings, half to “lifestyle inflation?” Wouldn’t that give the best of both worlds? You still accumulate wealth, with an eye toward financial independence, but get to have some fun along the way?

    1. Sound like a good strategy to me! The good thing is that you will eventually bore from lifestyle inflation and end up saving more over time IMO.

      How’d you find my site btw? Welcome aboard!

      1. *chuckles* I hang out on the fringes of the PF world. I believe that it’s actually through comments you left on MMM’s site that lead me here. Yours is one of many feeds in my Google reader that I check in on occasionally. Here, I tend to read the newer posts, and “link surf” back into older things, commenting when I find something to which I think I can contribute.

        1. Nice. I loved getting beat up by the commenters on MMM! So fun!

          If your vice is computer hardware, then good luck my friend. There will always be something more expensive, faster, sexier for sure!

      2. Oh, and when it comes to my vice, big and horrifically overpriced computer hardware, there’s always some newer, bigger, better, faster, whateverer…

        I don’t anticipate inflating out of the fun of that any time soon… ;)

  17. I’m considering three variables that you might not be here:

    1. What if nothing you buy or spend toward ever makes you happy? What if misery and regret plague EVERY decision you make? Do I work and make more? Okay, still unhappy. Do I spend on this great ? Okay, still unhappy. When there is no happiness, there is no need to blow money. Sadness is free.

    2. What if you’re putting away money so your descendants will do better? I know they’ll generally just blow it, but real wealth is built on relentless saving early on (and by “Early on,” I’m talking decades) followed by an eternity of wealth through prudent long-term investing. This is a reasonable sacrifice to make IMO. Give me suffering today so that someday, someone might be happy. Depressing, but what else is there?

    3. What if you’re building wealth because you aren’t going to die? If you were immortal, would your way of life change?

    If I may ask, how is it “a dime a dozen” to get a six-figure job? I’ve never made that much. I’ve never broken the $50k barrier thus far.

    1. I write from the perspective that I’ve been saving a lot, and remind myself and others that we should spend too. I’ve saved 50%+ of my after tax income for 13 years, and 70%+ for the past 5 years. But, nut I am retired at 35 and loving it to be frank!

      If you just look up the median pay for the top 20 MBA graduates, you will see thousands of 29 year olds make over $100,000 for example. If you want to make $100K+, just got to go work in the fields that pay such levels.

  18. I have been out of college for almost 2 years now and will have a net worth of $100,000 by the end of the year (markets-willing). I graduated with a net worth of $30,000 and I have grossed 6 figures for the 2 years since I graduated.

    During university, I was pretty cheap and miserly with my money. My parents paid for a lot of my expenses while I was on campus and I did internships each year. One of my goals after graduating was to keep the lifestyle inflation down, but still feel happy about what I’m spending money on. I now spend about $3,000 per month, but I am on track to save about $55,000 for the year. I’ve been banking my vacation time so that I can take a 4-week vacation next year. I just haven’t decided where I’m going yet!

    Part of it is that I’ve just never been very good at spending money and part of it is that I really don’t know how to spend the amount of money that I earn each year. I just have no emotional or physical need to do so. Last year, I bought a brand-new car with cash for just over $20,000. I’m saving up for a down payment on a house, but I don’t know if that’s really what I want to be doing in a few years. I’m investing 20% of my gross income towards retirement, including maxing out my 401(k). I enjoy what I do for work, for the most part, but ideally, after working for a few more years, I would spend a year or two traveling the world using my down payment savings.

    I’m at a point where money isn’t the limiting reagent in what I’m doing – me deciding what I want to do is the problem. So until I come up with a better plan than what I’m doing right now, I will continue working at the career that I enjoy and saving money. I try to not work too much more than 40 hours per work so that I can enjoy my time outside of work as well.

  19. Darwin's Money

    I like to think we have a good mix of saving ans spending. Sometimes, I worry a bit that we should be saving more, but we’re hitting over 20% in retirement and we’re on track to have 529 plans fully funded for 4 year degrees for each kid by 17. But, if I face a layoff, the whole picture changes, so you’ve gotta balance risk with saving for a rainy day with actually enjoying the product of your hard work!

    We PF bloggers have a bit of an edge over others in that we could help support ourselves somewhat with freelance and blog income in the event of an emergency.

  20. Great post. Balance is key. I admit saving and find great deals is a lot of fun, but if you go overboard, what’s the point? You can’t take it to the grave. Happy medium, people!

  21. I’m with you. From the examples of my friends and relatives, I agree that if you do not spend money, you will not earn.

  22. Kyle Steiner

    I really appreciate your point about having too much money when you die. Too many people I know died with millions of dollars but were not happy at all. You really need a balance in life.

    My website is . Could you comment on a few of my articles too?

    Thank you,
    Kyle Steiner

  23. I don’t make that much and I don’t mind saving. I’m trying to get less attached to material things and use my money on travel and fun times with friends instead. I’m on a declutter mission this year and it feels so good getting rid of stuff!

    1. I LOVE, LOVE decluttering! Zen Habits has a good post on decluttering and meditation which hit spot on.

      When we are free of things, we feel light and free. At least I do.

      I really just enjoy spending money on vacations and adventures. They are so fun and so worth it!

  24. Money Reasons

    I have a few friends that make over $250,000 a year but they live and look just like me (minus the occasional trips overseas). Originally they inspired my post called “Reasons To Spend Money – I Don’t Want A Coffin Full Of Dollars”. I personally think they should spend more money and enjoy life more fully. Not so much on material possessions, but more along the lines of experiences and memories (taking videos and photos as they go). Like you said above life is limit, make the most of it while you can.

    Nobody want to ski in Aspen when they are in their 80s or 90s?

    For someone like me, I have to settle for the typical middle class beach vacations (mainly in Florida and South Carolina, and maybe in the future Georgia or Mexico), but you can bet if I had the money, I would be traveling much much more.

    1. I wonder though if your friends are relatively even more at ease inside despite living the same lifestyle as you. The fact they are making that kind of money alone makes them happier since there’s little worries. Could be!

      1. Money Reasons

        You got it! Over they years I’ve come to realize that they are doing what they want, working the way they want and vacationing the way they want. They have complete freedom to do as they please whenever they want. So they are happy.

        1. Yep, I think I’m reaching that stage myself. When I went to grad school, it was so fun b/c I didn’t care about grades, just learning. As I get older and save more, work becomes more fun b/c I don’t depend on it as much to survive anymore. It’s freeing!

  25. While I’m no where near your friend making $300k, I find the more I make, the more nervous I become about spending money! When I first graduated college, it was freeing to make $20k per year. I knew I’d never save a lot with my salary, so I freely spent on luxuries like $80/hr voice lessons twice a month. I paid of my credit cards each month and either broke even or put a little bit of savings in the bank.

    Now that I’m making $90k, I can’t bring myself to paying for voice lessons, or other expensive purchases. I’m addicted to seeing my bank account numbers increase. Granted, my job isn’t stable (I work for startups so my job will never be stable) and I only have $130k in the bank right now. I keep telling myself I need $1M in the bank to feel comfortable, $4M to spend freely. But deep down I know if I ever had $4M in the bank I’d be too scared to spend that as well… at least in terms of buying anything that would be considered a luxury at that level of networth. I’d still be driving my busted ’99 Toyota (ok, maybe I’d buy a new used Toyota) and I’d be scared to see my networth go down.

    Still, I’m waiting for that $1M networth threshold to feel comfortable to make major life decisions/changes like having kids and buying a house.

    1. $130,000 cash in the bank after 5 years post college is a very good sum of money! You did graduate 5 years ago from your previous comment right?

      You’re right. The more you have, the more you don’t want to lose it, b/c it took so long and you worked so hard to get it.

  26. It’s all about balance.. I don’t want to stop my traveling and wait until I’m retired. What if I get cancer (which is highly likely, seeing that 1/3 people get cancer in the lifetime) and can’t travel anymore? It just wont’ be the same.

    traveling when one is younger vs older is completely different. I definitely won’t be able to do Mt Kilimanjaro when I’m 60, that’s for sure! though I know people who have :)

    1. Wow, that’s kinda depressing knowing that 33% of people have some sort of cancer. I better start eating more raw and healthier!!

      I want to travel before my knees give in. So, I hear ya!

  27. The thing with life is you have to “live.” That doesn’t always mean spending a lot of money, but it does mean doing those things that mean a lot to you and give you life experience.

    If you have the money to put away for retirement and save with lots left over, I see nothing wrong with a great vacation, good meals, and more. I think living just for money accumulation is truly running to standstill. Frugal can be important, for sure, but living is VITAL.

  28. Lifestyle inflation is a very real thing, so it’s interesting to consider the other end of the spectrum. I would say overly frugal is not an issue for as many people. but I couldnt agree more. If you make that much, try and live a little.

  29. Dividend Monk

    I think it depends on the individual.

    I spend a fairly small percentage of my income. It’s not because I force myself, but instead simply because there are few material things I want to buy. When I perceive something to provide value that is worth the cost, I buy it. Plus, I value experiences over things, so I’m more inclined to spend on an experience than on a thing. I like enough income to do what I want to do, but anything above that is going to be saved or given.

    Your car example makes sense- if a $30k car will make someone quite happy, and they’re making ten times that amount, then buying a cheaper car just to save several grand isn’t really worth it. Go for the nice and beautiful thing.

    My reasons for saving so much are that I’m capable of making a substantial income, but have little desire to spend it, and the money can be put to work so that me and those I am responsible for are financially set. Any more than that can be sent to charities or used for various causes. When one has enough money to live off of, then work they do is for enrichment rather than out of necessity, which is a good situation to be in.

    There are definitely instances where it can go too far, though.

    1. Dividend Monk

      I save 60-70% of after-tax income. The percentage increases each year as my income increases more quickly than my expenses.

      1. Good stuff. Do you ever get a sense that you are saving too much though? I guess it also depends on your income level eg if you are in the top two tax brackets, living off 30-40% is still pretty good. But then again, if you make less than 100k, living off of just 40-30k gross is kinda tough no?

  30. I agree with some of the comments above that mention money buys time. I don’t make a lot of money, and 2010 was the first year I cracked the $40k mark, yet I still plan to retire by 40 years old. I try to save at least 50% of my net income….which is a lot for a low income base. I’d rather live the rest of my life frugally, free to spend my time how I want then working until I’m 65 and spending my money on material objects that have an immaterial net effect on my happiness!

    Thanks for the article, and it’s always nice to provoke one’s thoughts on one’s way of life.

    1. Hi mate, that’s great you are saving such a high percentage on your income level! Stick to what you believe in and I’m sure you will be a success! Thanks for your thoughts.

  31. Take a year off Sam, or two. Travel the world. If you don’t have children yet, now might be the perfect time take off. Perhaps, the longer you save that kind of income, the more stressful it will be to spend your money.
    As for the fancy car. I’m probably an odd one when it comes to that. I’d only like to drive it, at night, when nobody could see me. Is that weird?

    1. Sounds good Andrew. Although, the person I use in this example is not me. It could be a person making $80,000 a year and only spending $25,000 a live.

      Taking a year off would be great, b/c I never took time off from college to work. A sabbatical would be nice!

  32. I like to think we have a good balance. I’m making sure we get 5 figures in college funds and retirement funds each year, but we take 2-3 vacations a year. Doing Disney soon! So, could be saving more. Could be spending more. But we’re trying to balance some saving for a rainy day, our kids’ future and enjoying life now!

  33. Mike - Saving Money Today

    I think it’s a fine line between being responsible with your money and being a miser. You can’t take it with you so you might as well enjoy life along the way. otherwise, what was the point of working so hard to begin with?

  34. You make some great points here. Makes a lot of sense for you, but most of us aren’t quite there yet.

    You are describing the difference between being frugal and being a miser. Silas Marner is a great book on that very issue.

  35. Srinivas Rao


    As I’ve mentioned in other comments I’ve always had a tendency to live beyond my means. Now I’m in the polar opposite situation of living below my means. I think you bring up some great points and you should probably enjoy life a bit when you get to the phases you’re talking about. I think however some people tend to increase their standard of living right on par with their pay increases. I think if you allow for a short time buffer life gets a bit more comfortable.

  36. Sam, if you want to spend more money then why don’t you take a better vacation this year? I suggested the Maldives but never heard any response…

  37. L Marie Joseph

    Everything need balance if not you’ll go crazy.
    I told my husband that I don’t want to want until I’m
    65 to see the world. I want to do it in my 30s while I’m physica
    I’m physically fit and can walk long trips. I want to create
    memories while my child is still young. I pay cash
    for my vacations because I don’t want the headache
    later. Save your money and enjoy the benefits

  38. I want to save enough to be able to give to my children when the time comes. Not to spoil them, but be able to give them a car, help with a house, etc. I also want to give myself some cool stuff later in life. So, I’m making a lot and saving a lot now, to hopefully spend it later.

    1. I donna man. Buy them a car and a house basically wipes out why they need to work much at all. I’d make them work for it, and only if it makes financial sense and they’ve proves their effort will I pitch in.

      They need to know the value of the dollar.

      1. I agree…I should have said help them in bigger words. They do need to earn it! My mom got me my first car, with the condition I worked to pay for everything to do with it. It was a POS old truck, but it was worth working for!

  39. I believe the most important thing to do is to set effective — realistic, purposeful, and measurable — goals with one’s money. Once these goals are established and are put in place, people should spend away on things that they desire.

    For example, if you want to retire by 40, find an online calculator, make some assumptions for investment rates of returns and how long you would like to live in retirement, and see how much you would have to save monthly to have a certain annuity. If it turns out to be $1000 monthly, but you are currently saving $2000, then for Pete’s sake stop saving so much money and live a little.

    With $300,000 annually, and relatively low payments on mortgages and other things, there should be no reason why this person couldn’t spend $100,000 on dumb ass things, but things that make them happier. In fact, at $300,000 annually, I would hope that he or she has no mortgage, especially before they buy an M5, M100, or M[fill in whatever number you like].

  40. I think I agree. Most people who are frugal to the point of miserly never experience life. It’s not like they will all of a sudden through caution to the wind and live it up during their retirement years. Most contrary, if a person is miserly during the prime of their life, that behavior usually continues into retirement. It’s sad, but true.

  41. Jurrell Kemp

    Making a large amount of money is nice but people have to remember one thing “you can’t take it with you” it’s good to save and give at the same time but at the end of the day it’s better to help someone with that money rather just let it sit for years to come.

  42. I think you bring up a great point. There’s no point in saving your money until you die – you cant enjoy it. Of course, If you’re interested in leaving some for your children/grandchildren, then do so, but spend everything else – you cant use it when you’re dead.
    I have to second the thing you mentioned about fitness – I may be heading to alaska this year, and really want to go visit the national parks north of the artic circle – they say about 300 people get in there per year. I really, really want to go, but getting there requires chartering a flight, which can cost hundreds of dollars per hour. I can save for it, but on the other hand, I’ve still got debt. but I may not be fit enough to do this 5 years from now. Who knows?

    1. You will LOVE hiking McKinley National Park! I did that in college, and it was so amazing. Flew in by water jet to a lake, finished and stayed in a cabin. So beautiful! Do it!

  43. Are you nuts? Saving 70% of your after tax income is a terrible idea. You’re suppose to spend money to help lift us out of this slow recovery. Buy that new Porsche already, you can keep Moose around for when you go skiing. One of my buddy got himself an M5 after he broke up with his model girlfriend. Why stop at M3? hahaha! :D
    Great vacations are awesome! Don’t forget to blog about it though because you’ll forget about it when you’re in your 40s.

  44. All about goals right?

    If the miserly 35 year-old plans to walk away from work forever at 40 to travel the world or set up shop on a yacht just off the coast of France, his lifestyle makes perfect sense.

    But hoarding for hoarding sake is just a bit Scrooge McDuckish for me.

    My cheapness was burned into me at a young age as well. I’m also blessed with a frugal wife.

  45. There’s always the possibility that this successful 35-year-old hopes to retire at age 40. You sure can’t do that too well if you live it up in your 20s and 30s.

    That said, I agree with the basic premise of this article – I grew up in a “cheap” household and as a result I’ve always strived to be frugal but not cheap. The difference, to me, is that a frugal person knows their priorities and looks to save on the less important stuff, but spends more freely on the truly important things.

    1. I love your comment, “a frugal person knows their priorities and looks to save on the less important stuff, but spends more freely on the truly important things.”

      I agree 100% – I’m willing to switch deodarent, toothpaste, soap, etc to get for free as they do not matter. I’m also happy stay at inexpensive hotels when I travel. However, I’m also willing to eat in some of the nicest hotels in the world – money well spent to me.

      I have eaten at The Oriental in Bangkok, The Taj in Mumbai and Raffles in Singapore for examples.

      1. Ah, but have you eaten at the Sukhothai in Bangkok? :)

        I agree with the frugal comment too, but we should ask ourselves why we are so frugal. I’ve got a post coming up on the subject!

        1. Have not eatan at Sukhothai in Bangkok – maybe during my next visit to Bangkok – I have been more than 10 times as its easy to get flight to Bangkok.

          I stayed at the intercontinental for 5 night – you might be thinking – what about $10 hotels? Well this was with priority points and they were running a special so it was only 5,000 points a night instead of the usual 40,000 points. They did not even flinch when we came with our backpacks!

          I have eatan at the Amandari in Bali – at the time I did NOT know this hotel was over a $1,000 a night! The food was really good and probably about $100 – this was about 15 years ago.

        2. You guys need to look me up next time you are in BKK. For a great dining experience, I would recommend dining at Gaggan, it is a molecular gastronomy place that mixes it up with Indian food, the chef studied in Barcelona where the movement started.

          Dinner for two is $150, went there only once with my wife. We will go again but want to save it for special occasions. That is the point with nice things, they need to be infrequent enough to be fully enjoyed, in my opinion.

          Which is why I would like to stay in a modest $50 hotel for a few nights then follow it with a $400 hotel for 2 nights, it will be more enjoyed because of the contrast and the pleasure of savoring a rare experience.

          It’s like eating a slice of the best chocolate cake you have ever had, one with edible gold that costs $100 a slice. The first slice may be worth it but if you eat 4 slices you will feel less happiness than eating 1 slice. Such is the experience I have with expensive luxuries.

          If you were a king and all the luxuries were encountered each day I would argue it would be no fun or you would be so addicted to them then anything less would be torture.

          As for staying in Bangkok, the Intercon is pretty nice but so are many places along the river (Oriental, Marriott resort & spa, Peninsula, Hilton Millenium, and the Lebua State tower. The latter has a great restaurant and bar on the roof that is worth checking out, it has an ultra-cool atmosphere.


        3. In Reply to Mike Hunt,

          Thanks for the restaurant recommendation.

          All the hotels you recommended are great – however, when I get my value scale out, they do not make the grade. The intercontinental was AWESOME for the price a paid – 5,000 points a night! I did not even spend money at their hotels to get the points – I got a 30,000 point bonus when I got the holiday inn credit card.

          I love Lord Jim’s at the Oriental – have been about 5 times – they have great sashimi and great service!

        4. David,

          A new St Regis (part of the Starwood group) is opening up in Bangkok, and that promises to be an excellent hotel. Use points though as the per night price is expected to be north of $500 USD.

  46. In addition to my previous comment.. I think it is important for people to consider what things/activities they get real joy from in their life.

    For example, my main hobby is bicycle racing. It is not a cheap hobby. If I stopped doing it, I could increase my savings rate from about 65% to 75%. But I would not be as happy as I am. I know that it is a high priority in my life and so I choose a significant amount of money and time on it.

    Another example is spending money on eating out or fast food. Many people consider eating out to be a luxury or an element of a good lifestyle. For me, I am happier if I never eat out, because:
    – I can eat much healthier at home and thus do better in my racing
    – I don’t generally get any particular enjoyment out of eating out (the food or experience)

    I think that considering the enjoyment you get from spending money on certain things, prioritizing, and aligning your actions with your priorities is very important. People can be much happier that way than by just spending carefree.

    1. Whatever makes you happy Travis! Didn’t realize bicycling is that expensive… how much is your bike?

      I love eating out and am happy to pay up for great service and a beautiful meal.

      1. It’s a great/interesting world with all of the individual differences between everyone. What is a horrible bore to one person may be the time of their life to another. :-)

        Bicycling can be fairly expensive. Probably much cheaper than car or motorcycle racing as a hobby.. Here are what a lot of people who race spend on things:

        Bike: $2,000 – $6,000
        Racing wheels: $700 – $3,000
        Clothing: $50-100 for a jersey, $80-150 for shorts
        Shoes: $150-$400
        Helmet: $100-$300
        Powermeter & Computer: $700-$2,000
        Race entry fees: ~$30 per race. (x say 40 races = $1,200)
        Gas driving to races can be significant
        Plus a ton of other stuff…

        You don’t have to buy all that stuff every year. It is definitely expensive than cheap hobbies like reading, playing video games, etc.

        As racers improve and can join better teams, they can get discounted equipment and money for race entry fees. But it’s not a hobby that you can make any significant money in. (other than the very best – the pro’s racing at top level in Europe)

  47. This was one of the reasons, we started traveling on major trips years ago! Putting yourself on an extreme savings regime is like an extreme diet, it can not last.

  48. 1 – I agree that having a very high savings rate AND working until 70 years old doesn’t normally make much sense.

    A very high savings rate is a great idea in many situations, such as:
    – To retire significantly early
    – To save a lot of money to pursue some kind of life dream (starting a business, hiking mt. everest, being very charitable/helping others, etc.)

    2 – I don’t quite understand some of your assertions that spending more money translates into living a “much better lifestyle”. The particular example that stood out to me is the comparison of living in a one bedroom apartment vs a 2-3 bedroom house. How does living in a large home objectively make someone’s life better?

    I’d argue that in many cases, the opposite is true. The homeowner must spend significant time on upkeep, lawncare, etc..

    The travel example I do understand.. A few of the most memorable times of my life have been while traveling, though all domestically. Many have also happened within 100 miles of home.

    The thing is, different people get enjoyment from different things. One person may have as much fun as they possibly could while working out in their garden. Another might believe they have to go hike Machu Picchu or get bottle service in Moscow to be as happy.

    1. Well stated, Travis. I think the point though is to have people understand that there is a such thing as saving too much money. But Sam, I think it’s only a such thing of saving too much money if it makes you uncomfortable and miserable doing so. For example, if one saves $70K per year, and has been doing so such that their goal of retirement is way ahead of schedule, why shouldn’t they spend $5K on a desired vacation?

      I think what’s missing is the psychological aspect of the argument. So people are just bred to save for whatever reason, just like people are bred to rack up tons of debt. For whatever reason, it will always feel better to save $10,000 than to spend it on a watch or a luxurious hotel stay.

      I’ve been wanting an Ipad since last summer. The price? About 0.005% of my annual income. Why haven’t I bought it? I just can’t bring myself to understanding how it’s better than my laptop.

  49. It depends on what’s important to you. If you are perfectly satisfied the way you live and don’t attach too much importance to material things, it doesn’t mean you are miserable.

    Buffett has all the wealth in the world. He could drive a Ferrari and live in largest mansion in Manhattan if he wanted to, but I guess he doesn’t attach that much importance to these and instead lives in Omaha (of all places!) and drives his own Cadillac!

    As a kid I always wanted a BMW, but now that I can afford it, I don’t! Just knowing that I can afford it is good enough!

      1. It’s only a 414hp M3…with the new v8. The M5 has the V10 that has the 500hp. :) Not that it really matters…but it’s my dream car…and although I prolly can’t afford it, I’m shooting to purchase a used one in the next 2 years.

        I’m 26 now…wanted one by 25, but bought a condo first instead. (thinking it was a smarter decision vs. buying my baby!). Wish me luck!

    1. Excellent Points MoneyCone!

      I take a 6 week vacation most years to South East Asia or India. Here I ofter stan in $10 to $20 a night hotels. Many people can not understand why/how I could stay in such a hotel. However, I TOTALLY satisified with these hotels and do not desire anything more.

      1. 6 weeks? I took 5 years off and did more or less the same. I like to call it “pretirement” — why wait until your old to enjoy yourself. After a few years of working again, I’m back in pretirement. I make good money — when I work. There are a few reasons I don’t spend 70% (or more) of my income.

        1. I like not working.
        2. Just because I have an arbitrary set of skills that are in low supply and high demand today, and consequently command a high income, doesn’t mean those exact same skills will be in short supply and high demand forever. If they suddenly become obsolete, and I’m addicted to living on a significant portion of my income, I’m SOL. This happens to a lot of people — they confuse arbitrarily high market based wages with individual talent. How does the saying go? “A fool knows the price of everything and the value of nothing” — your income is often based more on a free market price, and is not necessarily indicative of your true value. You may be underpaid, but you may just as likely be grossly overpaid. The latter is not sustainable.

        Also, I stay in rat trap hostels because I prefer the company to the rats that stay in overpriced hotels (and why is it that overpriced hotels have the least comfortable beds and the least functional showers…) My wife and I live in a spacious 600 square foot apartment because we actually like each other and never want to be out of ear’s reach. And because we hate cleaning.

  50. I’m going to go out on a limb here. Are you trying to convince yourself or us? You make some valid points here that YOU need to heed if you are saving 70% of your income. Go ahead, live a little.

    1. Definitely doing some soul searching into spending more, however if you read my second to last paragraph, I acknowledge your poInt.

      The question is, if someone makes $300,000 in this example and spends only $90,000 on herself, is that too pauperish? Hmmm

  51. Money Beagle

    I’m with you. I think that as you make more money, you should be able spend more as well. The trick is to balance the increases you get along the way, so that you’re both saving and spending a little more. That allows you to ‘enjoy’ life (in terms of what money can buy) all along the way, not just at ‘the end’.

    1. That is indeed the trick. We get in such a habit this way or the other that we should constantly reassess to make sure we live the best life possible and spend on what we truly value!

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