If there is one time to have money and spend money, it's during and after pandemic. Money should help make difficult times more bearable. If you can't afford to spend extra money during a pandemic, then you can always revenge spend once the pandemic is over.
Revenge spending is a way to make up for tougher times since the lockdowns began in early 2020. Further, revenge spending may help you feel better about politicians locking you and your business down while they still get paid with benefits.
However, perhaps not everybody should revenge spend. Let's go through some criteria that should probably be met before splurging. Perhaps meeting at least three of the criteria before revenge spending is the responsible thing to do.
Reasons To Revenge Spend
- Didn't leave your house to do anything fun for more than six months
- Didn't visit friends or relatives for more than six months
- Held onto your investments through the worst of the crisis
- Juggled work and parental duties full-time for more than 10 months
- Held onto your job for the duration of the pandemic
- Kept maxing out your 401(k) and saving 20%+ of your after-tax income
- Started a new project or side hustle that is making money
- Finally launched your own website that cannot be shut down by the government during a pandemic
- Improved relationships with your immediate family members
- Worked as a frontline worker during the entire pandemic
- Showed empathy and kindness to others with your time and money
- Didn't catch COVID or give anyone COVID
- You have a multi-bagger investment gain
- You smartly took advantage of record-low mortgage rates and refinanced.
Reasons Not To Revenge Spend
- Got COVID-19 and spread the virus to others
- Refused to wear a mask and respect other people in public places
- Didn't take up any hobbies or start any side hustles
- Stopped working on your website or side hustle during the pandemic
- Decided to quit your job instead of negotiate a severance when negotiating a severance has never been easier
- Made no improvements in any areas of your life
- Gained more than 5% of your body weight
Personally, I'd rather revenge spend after making more money or doing something good. This way, spending money feels more rewarding.
However, for those of you who are pissed off that your personal liberties were taken away for so long, revenge spending is one way to make yourself feel better as well.
Why You Should Revenge Spend More Money
The pandemic reminded us about three things:
1) Tomorrow is not guaranteed. We better make the most out of each day for today could be our last. The YOLO Economy is going to be amazing as people live it up more.
2) To make money, it's better to be an asset-owner than a laborer. With risk assets surging to all-time highs and service economy jobs still way down, there has never been a more clear reason to be an investor.
3) Consumption smoothing is difficult. For the investment-minded individual (that's you), during times of uncertainty, you tend to hoard money and not spend. You then tend to keep aggressively saving long after the worst has passed.
During good times, you then tell yourself to save for the impending bad times, which is still fresh in your memory. The cycle repeats until you are left with more money than you need. This is great if you are following the Legacy retirement philosophy. However, there comes a point where you are saving way too much.
Of course, if you are struggling to make ends meet, please do not revenge spend. But for those of you who've been able to maintain or grow your net worth during the pandemic, a session of revenge spending is encouraged. Otherwise, there really is no point working so hard and saving so much.
Hoarding Massive Wealth Is Stupid
Imagine being worth $100 million. Would you bother continuing to work at a job you hate? Heck no! Yet, I know guys who do just that because they want to be billionaires. They think they won't be happy until they achieve such a milestone. Nuts!
Because of their inability to consumption smooth, upon death, they will likely have to pay at least $40 million in estate taxes to the federal government.
Sure, they could set up a GRAT and other things to try and reduce their estate's tax liability. However, at their net worth trajectory, paying a lot of estate taxes is an inevitability.
It would be much better if they spent the money or gave it away while they lived. The same goes for all of us.
Personally, I plan to revenge spend in 2023 and beyond as part of my goals. After writing Buy This, Not That, a Wall Street Journal bestseller, being a stay-at-home dad to two kids, and working on Financial Samurai, I need a break!
As a 46-year-old this year, I am in my first year of decumulation mode. I do not plan to die with a lot of money because I don't want to have wasted my time and energy.
Spend To Conquer A Scarcity Mindset
Revenge spending is an exercise to help break the scarcity mindset. One of the reasons why we save during bad times and good times is because we consistently fear bad times will come again.
I have been diligently saving 50% – 75% of my after-tax income since 2000 because I saw so many people get let go during the 2000 dotcom collapse. Then came the 9/11 terrorist attack. Then the 2008-2009 financial crisis really knocked us out for several years. And now, of course, it's the global pandemic.
Shoot. I don't even have a job and I'm still worried about a job loss!
As a father, my mind is always wondering: What else bad is going to happen next?!
Unexpected bad things can and will happen. As a result, I bet there will be a whole new generation of money hoarders for years to come.
The longer you live, the more good things will happen to you. Unfortunately, the longer you live, the more bad things will happen to you too. We tend to remember the bad events more than the good events.
Don't let the global pandemic permanently lower your standard of living for the rest of your life. Course correct through revenge spending.
If we can't spend money during bad times to make our lives better and we can't spend money once the bad times are over, then when can we ever spend money?
Revenge spending helps break the scarcity mindset cycle.
Determining How Much To Revenge Spend
Let's say you're used to being frugal for years. Instead of going on a multi-year-long revenge spending binge where you often find yourself passed out in a luxury suite in Vegas, start small and revenge spend your way up.
Starting small can include revenge spending for just a week or only during holiday sales. Starting small can also include revenge spending on lower-ticket items first. I suggest you do both.
The idea is to slowly cure your frugality disease or money guilt by changing your habits one little step at a time.
I've suggested a good spending ratio of 2:1. In other words, spend $2 on something beneficial, like an investment for every $1 you spend on a splurge.
Responsible Methods To Revenge Spend
Another way to revenge spend is to follow my 10X Investment Consumption Rule. The rule states that if you want the latest $1,000 iPhone, then you best make at least a $10,000 return on an investment to pay for that unnecessary item.
However, the 10X Investment Consumption rule is also born out of a scarcity mindset. It often takes a very long time to earn 10X more than the cost of an item you want to buy.
Perhaps the most responsible way to revenge spend is to take 10% of your annual investment returns and blow it on whatever you want. This way, you've still got 90% of your investments hopefully working for you. You're also not paying a lot of taxes and you're rebalancing your portfolio.
If you tether consumption to investment returns you will never go broke. You will also likely eradicate any money guilt you have for spending money.
Revenge Spending Ideas
With the S&P 500, NASDAQ, real estate, and other assets near record-highs, you would be remiss not to do a little revenge spending. It feels great to take profits and buy something you can actually enjoy!
Rising interest rates may derail the rally in the short-term. Therefore, you might as well utilize some of your profits on a better life.
1) A quality mattress ($1,000 – $5,000)
We sleep on our mattresses 6 – 8 hours a day on average. If you want to be productive while you're awake, a good mattress should help facilitate a good night's sleep. Mattresses should be changed about once every 10 years for optimal performance and hygiene.
If you have allergies or don't like bed bugs, changing your mattress every 10 years should help, along with an allergen cover. We bought Four Seasons Essentials mattress encasements for all of our mattresses to help extend their life and reduce allergens.
2) A humidifier ($100 – $500)
The air gets dry during the winter. As a result, your throat and nasal passages can also dry out. Get a high-tech humidifier to help regulate the humidity in your room to allow you to breathe better.
Aprilaire makes a fancy whole home automatic humidifier that costs about $250 full price. It pulls heated air from your furnace directly through the humidifier and can cover up to 4,200 square feet.
Or if you want a simpler, way more budget-friendly option, the TaoTronics Cool Mist 4L Ultrasonic Humidifier is a popular choice.
3) A Google Nest thermostat ($200 – $300)
A Google Nest thermostat is great for controlling the temperature of a room, floor, or entire house from an app. The thermostat will learn about your temperature preferences throughout the day and automatically adjust itself accordingly.
You can also easily program temperatures throughout the day and week with your phone. The 3rd Gen Nest Thermostat comes in a bunch of colors now and works with 95% of 24-Volt heating and cooling systems.
If you have a large house on multiple floors, a Nest thermostat is particularly helpful because you won't have to get up to manually adjust the temperature any longer.
4) A fancy vacuum cleaner ($200 – $800)
After we got the Dyson Animal Cordless Vacuum, I began to love vacuuming the house every week. Not only is the Animal powerful, it's cordless, saves your back, and it's very gratifying to see all the dust and debris collect in the see-through canister. Those old, loud, and heavy vacuum cleaners are so passé! I loved mine so much that I bought my parents one too.
If you want to motivate your lazy spouse to do some housework, buying fun tools like a vacuum cleaner with a see-through container may just do the trick.
5) A Coway air purifier ($300 – $1,500)
Due to COVID-19, great interior air ventilation is more important than ever before. Not only should every classroom have a high-quality HEPA air purifier, so should every home.
The air quality in your home can sometimes be worse than the air quality outside. Why not purify your air of excessive bacteria, dust, and other impurities, especially if you work from home, have allergies, have asthma, and/or have little ones?
Many west coast residents also go through weeks of intense forest fires every year as well. The time to buy an air purifier is before the forest fires ignite once again.
I bought three Coway Airmega line of Smart Air Purifiers which automatically adjusts fan speed based on the amount of pollutants in the air in real-time. They come in a range of sizes with or without wifi/app functionality too. I also bought a smaller air purifier for my daughter's room.
Oh, and one thing you should remember doing is updating your homeowners insurance policy. Home values have increased and you might be in a natural disaster area (fires, etc).
6) A hot tub ($5,000 – $25,000).
The best revenge spend I've made over the past five years was buying an outdoor hot tub. I bought a Sundance Altamar hot tub for about $13,000 after tax + $2,000 for electrical work.
Once the lockdowns began in March 2020, I went from using my hot tub 2X a week to regularly 3-4X a week. Not only did my hot tub provide a nice sanctuary for me to listen to podcasts and think of new post ideas, it was also a fun place to take my son. With our son out of school, it was great to have a water activity to mix up the day.
The hot tub also provided reprieve for my wife. I would take my son to the hot tub for about an hour (lowered the temp to 98 degrees) and then give him a shower after.
Giving him a shower saved about 15 minutes as part of our son's nighttime routine. Being out of the house for 1-2 hours also enabled my wife to rest more or spend more quality 1X1 time with our daughter.
Having a hot tub is absolutely my favorite must-have item during a lockdown. Being outside is already calm-inducing. If you do a lot of physical activity, having warm jets massage your back and feet is heaven on earth.
See: The Cost Of Maintaining A Hot Tub
7) A fine watch or jewelry ($5,000 – $30,000)
Nobody needs a fine watch just like nobody needs jewelry. However, since we are revenge spending, a fine watch or jewelry are definitely items on the list.
Personally, I like buying limited-production stainless steel watches like the stainless steel Rolex Daytona. You can't buy one for list price unless you're on the dealer's special list. It's fun to buy watches that look good, has a purpose, and can potentially increase in value.
For more info on buying and selling watches, you can read about my side hustle as a watch dealer.
Unfortunately, I'm not wise about fine jewelry. The most expensive jewelry I ever purchased was my wife's engagement ring after some extensive research on cut, clarity, carat, color, price, and branding.
I've put together everything I learned about engagement ring buying in this post. I also have a fun engagement ring buying rule for pragmatic couples who believe in equality.
8) A safer car ($30,000 – $120,000)
One of the leading causes of death in America is car accidents. According to the National Safety Council, there were over 40,000 car accident deaths in America in 2019.
The main causes of death are drunk driving, speeding, and cell phone use. If you drive often and/or have a family, it's worth spending as much money as you possibly can on safety. Once you do, the best way to minimize getting into a car accident is to be an alert and defensive drive. Speed really kills.
Here are some of the safest cars to choose from.
9) A Toto Washlet ($400 – $1,500).
After buying a Toto Washlet for the fixer I bought on the west side of San Francisco in 2014, I can never go back to non-bidet toilets. Going back to a toilet without a bidet is like chucking your smartphone in a lake and only using a landline telephone. Never gonna happen!
For the other fixer I bought in early 2019, I went overboard. Instead of buying a lower-end Washlet for ~$500, I bought three top-of-the-line Washlets for $1,500. I decided to get the best because I was already spending so much money on remodeling labor. In retrospect, an entry-level Toto Washlet was good enough.
If you don't have an electrical outlet close to your toilet, then get a non-electric bidet like the Luxe Bidet. It's only about $35 bucks and can be easily installed yourself. Spraying yourself with cool water is better than no water!
Besides, you'll save a lot of money on toilet paper, which has sometimes been hard to get during the pandemic. When we started seeing shelves run out of toilet paper we felt a little giddy at the silliness.
10) Fun Memorabilia ($100 – $1,000)
My one ongoing vice is spending money on things I wanted during my childhood but couldn't afford. As a result, I've bought retro-Air Jordans, retro-Agassis, and dozens of He-man toys from the 1980s.
The great thing about buying all these memorabilia is that they don't cost a lot. At most, a new pair of retro-Air Jordans cost $200. Each He-Man figure costs between $10 – $80. Nothing I'm buying will likely appreciate in value.
However, if you want to buy memorabilia that has the potential to appreciate in value, you can do so easily online now.
11) Home entertainment system ($300 – $20,000)
Who doesn't love to watch movies and Netflix shows at home? I've only gone to the theatre three times since 2010 and each time I regretted it! Instead of spending $15/per on a ticket, $10 for popcorn, and have to drive, an awesome home theatre system with a huge high-definition TV and 5.1 surround-sound is a better experience.
We bought our 60″ Sony Bravia 4K TV several years ago for around $800. Now, you can get even larger and clearer TVs for cheaper. It's nuts! We also have a nice receiver and Definitive Tech speakers and subwoofer.
12) Fine Foods Like Caviar, Lobster, Kobe Beef, Jamon Iberico ($100 – $5,000)
If there's one thing we've learned from politicians like Gavin Newsom and London Breed, it's that we should live it up and eat the finest foods.
Most of us probably saved a lot of money cooking at home during the pandemic. Therefore, once the pandemic is over, it'll be fun to make reservations at all the top-rated restaurants in your city.
If you still don't want to go to restaurants for a while, you can get all the finest foods delivered to your door nowadays.
13) A sweet house ($500,000 – $10,000,000)
Spending money on a hot tub is one level of revenge spending awesomeness. However, buying a sweet house is the ultimate revenge spend! I'm thinking of upgrading homes given my investments have rebounded in 2023.
Owning a larger house with decks, more outdoor space, and views in a less dense area is the best money spent during a pandemic and after. We're all spending more time at home. Therefore, it's important to have a more spacious home to work and relax.
A larger house is also great if one of your family members gets sick and needs to quarantine. If you have more bedrooms or private areas, you lessen the chances that other people in your household will get sick. Given health is priceless, being able to be more healthy in a larger house really increases its value.
Finally, not only do you enjoy a higher quality of life in a larger house, there's also a good chance it will appreciate over time. When you can enjoy a nice house and make money, you're really winning.
The best time to own the nicest house you can afford is when your kids are living at home with you. If that's you, I'd look for better deals over the next 18 months.
14) New home appliances ($1,000 – $20,000)
If you already have a sweet home or can't afford a new home, an easy way to spruce things up is to get new home appliances. Your home is your caste and one of the best things to revenge spend on.
Think about how often we upgrade our electronic devices. We get new phones every 1-5 years. We buy new TVs every 5-15 years. Why not upgrade our washer/dryer, range, refrigerator, dishwasher if it's been a while?
Hiring a handyman to change your fixtures (doorknobs, faucets, curtain rails, etc) is an easy way to update your home as well.
Finally, replacing old windows and doors with new windows and doors is one of the best returns for your dollar. The noise and temperature insulation are fantastic.
15) Endless in-person service ($50 – $200/hour)
Once herd immunity is here, it's worth treating yourself to in-person service. For example, how many of us are dying to get a massage or a chiropractic adjustment? I used to get a massage at least once a month. When things go back to normal, I'm getting a a massage at least once a week for three months.
Another service you might want to consider is hiring cleaners. I'm presuming most people have tried to minimize non-family members into their homes since the start of the pandemic.
What's great about in-person expenditure is that these folks need our help the most. Not only are we spending money to improve our lives, we're also improving theirs. Add on a nice tip, and everybody is winning all around!
16) Fly Private ($1,000 – $10,000/hour per person)
Forget jumping from economy class to business class to first class as you build more wealth. Fly private once everywhere opens up! If you've got a big family, all the more reason to fly private to amortize the cost.
Flying private and owning a mega-mansion are really only the two things that differentiate centi-millionaires and billionaires from the rest of us. Therefore, if you can fly private once a year, you're at least half of the way there. Of course, if you end up buying a sweet house as well, then you're basically there.
17) Join A Private Club ($3,000 – $150,000 + ongoing fees)
Joining a private sports club or social club is a great way to network, boost mental health, and get some exercise. If you have kids, a private sports club with a pool and other facilities may also be a great outlet for them as well.
If you're in business, the networking aspect of a private club is huge. You may have existing clients at the private club where you can deepen your relationships. The club may have prospective clients as well. The stronger you grow your network, the potentially greater your net worth.
Joining a private tennis club has greatly expanded my business and social network. With a growing loneliness epidemic among us, a private sports club has been extremely valuable to me.
18) Private School ($15,000 – $60,000 a year)
Let's say your two million dollar portfolio is up 40% thanks to a great year in the NASDAQ. Why not use some the $800,000 in gains on private school?
One of the best gifts you can give your children is the gift of education. If you can find a private school with smaller classrooms, regularly in-person classes, and more interesting curriculum, it could be worth it.
Revenge spending on private school might provide for the longest dividends. Just make sure you find a school that's the right fit. Don't forget to superfund your kids' 529 plans. A 529 plan is one of the best generational wealth transfer tools today.
Related: How To Get Into A Great Preschool Or Private Grade School
Revenge Spending Is So Sweet
If you've survived the pandemic, you should really celebrate. Let us revenge spend to our heart's content. Feel free to give your excess wealth and cash away to others in need as well!
I'll be shooting an e-mail to my watch dealer to see if there's anything rare worth buying. The last time I bought a nice watch was in 2008, during the last financial crisis. Hence, it would only be appropriate to revenge spend during our current crisis.
I'll also be spending tens of thousands of dollars finishing up a ground floor remodel at a rental property. The space will go from around 250 sqft to 625 sqft. I've installed three new windows, added a bedroom, a closet, a full bathroom, a hallway, and a laundry room. But this really isn't a revenge spend as it is a remodeling investment.
My real revenge spend will be renting a nice house in Oahu near the beach for a month. At four and a half, my son should also begin to remember his childhood more.
The degree to which we revenge spend is up to each of us to decide. I've offered up many considerations in this post. Surely you will have your own ideas on what to revenge spend on. Let's enjoy our wealth! Our investments have certainly warranted spending more on a better life.
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We are retired since Fall 2015. We rented at Vista Waikoloa on the big island HI 3 months each year to scuba dive with Blue Wilderness 2 -3 times each week. We also stayed 3 months each year at Terra Vista in FLA. We also traveled to other wish list locations 3 months each year and enjoyed our home on Eastern shore of Maryland the other 3 months each year. Our travels ended March 2020 with scamdemic.
September 2021 my wife was diagnosed with HER2 breast cancer. The first 3 months was traditional treatments, remove small tumor and some chemo. My wife is a brilliant OBGYN and has studied non stop the HER2 BC.
Since the start of 2022 our revenge spending is alternative treatments about 10k per month. We travel to Buffalo NY our childhood home for a one week treatment regime monthly. Currently use 3 alternative MDs, alternative nutritionist, family MD and acupuncture practitioner. So now my wife has a team to guide and prescribe to healthy out come.
I am very glad I maxed out 401k since 1983 to 2015.
We hope to spend 2 months at Vista Waikoloa scuba diving in 2023. During first 5 years of retirement we spent freely and ended up with another one million in IRAs.
Sam, this was a great light hearted post about spending in general. I have a difficult time spending money after trying to save aggressively for our future, but no FIRE. However, my revenge spending was only for $160 pair of hiking boots. Gotta start somewhere!
Sam
Your side hustle as a watch dealer article was really cool!
I am starting to communicate more often with upper class members of society and often these conversations will turn to their affinity for Expensive Watches!
I imagine your personal network and non abrasive communication style is stronger than most; and is likely why your side hustle worked well for you.
I do not believe this would be something I could add to my passive income generation.
This post popped up like normal!
“NIKE”
Pity Me story Three!
Poverty versus Poor!
I mentioned in in previous posts, that my brother had hung himself at the age of 15 while being held in an adult jail facility.
Full disclosure, my mother was the person who turned him into the authorities for having stolen a $5.00 item from a local store.
My mother had given him $5.00 to purchase a gift for the class organized Christmas gift exchange the next morning.
My brother spent the $5.00 on video games (For those of you who can remember this was a popular American culture thing during the early 1980’s).
He then stole a doll for a gag gift and I am not certain how my mother became aware of the theft, but as a 32 year old prison guard trying to make sure her kids did not end up in the prison system; she accepted the local judges advice that it would be good for her son to get early exposure to the legal/incarceration system so as to prevent him from becoming a future hardened criminal! (Hindsight being 20/20 the judge was prophetically correct, if a kid kills himself at 15 he will/can not become an adult hardened criminal at 30.) Who could of known that outcome of the judges educated and logical thinking?
Remember all men are evil, a good man works hard everyday to not be!
My mother was very serious about (lying, cheating and stealing) to the point she lost a son and quite honestly another future story will reveal my life altering turnaround moment!
So onto the pity poverty story!
I woke up the next morning and was going downstairs for something when I saw my mother sitting on the lower steps of the stairwell.
I remember my mother who seemed to be in what I can now say was disbelief and shock say to me that “Robby” had died the night before and that if I did not want to go to school that morning I did not have to go.
As disgusting as this sounds I just shrugged my shoulders and told her I would go on to school.
This day was the last school day before Christmas break and wouldn’t you know it, they were showing the movie the “The Outsiders”!
So if you have not seen the movie you should, it became an instant classic for class warfare!
Social’s versus Greasers!
Wealthy versus Poor!
I really did not grasp what dying actually meant then and to tell you the truth I am not really sure about it now! (I now know a lot of dead people most of whom I liked or loved!)
Well it seems when a poor boy dies just before Christmas it creates an enormous amount of charitable outpouring!
Yes everyone who would have gained personal pleasure in spitting on my mother and her 6 children the day before could not do enough for her and her now 5 children!
Do gooder’s within the community were everywhere making sure their entire social network knew just how much they were doing for this despicable and pathetic family in their hour of need!
This is just one of at least 3 “Poverty Christmas stories!”
Well that Christmas my family received an outpouring of unique gifts and gatherings!
Some parents were really interested in teaching their children to give up their old toys to these wretched children living in their community! (I actually liked the older electric car racetrack, however the other used and mangled toys were somewhat degrading).
Some churches decided to donate clothes and new toys! (Sounds Great but wait for it!) They thought how wonderful it would be to have our classmates pick out the gifts!
One lady from my church even went a step further and decided to teach her sons how to be nice to those who are less fortunate than themselves and actually made them spend 3-4 hours with me as if I could be their new friend. She then gave me $10.00 and took me to I think was a Wal Mart to buy anything I wanted.
So I bought a pair of really cheap shoes with the money. (No Brand Buddies).
Well a few days later Christmas came and my brothers and sisters all had a spectacular gift receiving Christmas!
We all even got a pair of brand new (You Guessed It!) “Nike” tennis shoes!
Well I had been harassed by wealthier people my whole life (Funny that barely being 12 years old was considered a whole life!) about the quality of my clothes! It did not help that I was growing up in one of the wealthiest counties in Kentucky at the time so the wealth gap all of the Dumocrats keep talking about was exponentially higher than anywhere else in the state and likely most of the country!
So after Christmas break when school started back I began wearing my buddies to school instead of the “Nike” shoes I had received!
Well my remaining older brother and sisters were really excited to have these in style “Nike” tennis shoes. For me it was a disgusting insult and at the time before I reflected later as I got older I was genuinely appreciative of the lady who gave me the $10.00 from which I chose to purchase the buddies.
Now comes the dry rub:
A week or two into the new year I was approached by one of my classmates who could not stand the fact that I was not wearing the “Nike” shoes that she knew I had gotten for Christmas because she and others from her church group had selected them! Yes the humiliation could not have been anymore devastating to my personal pride and ego!
Now comes the Salt Rub:
Shortly after that encounter my Buddies had gotten wet due to playing in the snow and I decided to leave them on the porch to dry out!
Well the next morning when I went to get them they were gone! (Yes, I believe my brother or one of my sisters through my shoes away so I would have to wear the “Nike” shoes as I did not have any other shoes!). Everyday until I grew out of those shoes I hated “Nike” with every ounce of my being!
By all means teach your children the value in thinking that materialistic and monetary support are what the poor need!
The humiliation and indignation that comes with the loss of personal pride from others who imagine they are superior and more worthy of praise for having the status and evil character to show the world how pathetic you are is quite immense!
My family members who accepted defeat and a life of degradation in the face of all of this liberal ideology are still living in the same squalid conditions as we were when I was 12.
I am not in the same condition and yet we can tell by posted comments that even my successful progression from the lowest 5% to the top 7-10% of net worth households is mind crippling to some of those who imagine they deserve to be in a higher status state without including a person like myself who comes from my poverty background!
Poverty versus Poor
No matter how much you attain you can never be accepted as an equal if you did not start at the same higher level!
Hollywood movies will always project the truth about the evilness of mankind!
By the way I forgave “Nike” and began wearing their attire sometime in my late 20’s early 30’s but since they began supporting the disgracing of the American Flag along with the “K” communist party who have never realized that the “American Flag” came before the Constitution and therefore is the only symbol that is not tainted with evil against any groups of Americans! Burning or disgracing the flag for any purpose can only be done by someone who wants the death of America to occur!
Any acceptance of this behavior by anyone else is an absolute confirmation of their cowardly character to intervene and prevent the destruction of our fellow American citizens right to Life, Liberty and the Pursuit of Happiness!
Next weeks poverty versus poor story:
Car Sales and Mechanics!
I’m really sorry that happened to you. It must have made you feel even more poor. How humiliating.
So give anonymously to an organization rather than the “in your face” that happened to you. But do give. About 20% of the children just in this first world country aren’t sure when they’ll eat again.
I treated myself to a 2021 Porsche Macan Turbo. Big ticket item! But it was under 3% of my net worth. I am good on the spend.
Nice! Hope it’s fun. I like the 911 Turbo myself.. but don’t make over $2 million to follow my 1/10th rule of car buying!
In another life perhaps.
JKL
Congratulations!
Not living life in order to pray for an easy retirement is ridiculous!
Enjoy the Porsche!
Just don’t get crazy and prove my point above as a false narrative by getting into an Accident.
Good on you to have attained such wealth early enough to enjoy it!
I am one of those lowly laborers that should not revenge spend!
Although I should note to the readers here that when a skilled laborer works 60+ hours a week he can achieve $200,000 + for income!
Kahala beach? Look forward to having you as a neighbor Sam! Just make the move already you’ve been posting about it for so long now, and have already missed out on many family beach days during covid!
Indeed. But there’s been a lot of family beach days here in San Francisco too :)
It’s been over 65 degrees all February. The longer the delayed gratification, the better the reward!
Sam
Who needs a Pandemic to feel the pain of life without desired materialistic things?
The Poverty Stricken mindset ensures that you will never imagine an opportunity or right to deserve or desire anything so once you can afford it you buy it now without concern or remorse as it will likely be taken from you tomorrow from some evil bastard anyway!
I have been revenge spending since I graduated Marine Corps Boot camp and received my first bi-weekly $350.00 paycheck back in December 1988.
Bought a “Black Leather Jacket” similar to the one Emilio Estevez wore in the “Outsiders” (1982). I will refer to the importance of that movie later in a separate post “NIKE”, poverty versus poor!
I also got a “Eagle, Globe and Anchor” tattoo!
OORAH! Semper Fidelis!
I tell my wife everyday to spend whatever is in our bank account as it has no bearing on my retirement plans for our future!
Tomorrow will be our 26th Anniversary!
I can assure everyone here that I am the clearest 1st Place winner of all time in this thing we call life!
If any of you truly believe that God does not exist I could make you believe in a split second in him without question just by showing you the miracle and grace he has bestowed upon myself by allowing me to be the man to call her my “wife”.
I actually have no real friends (The 8 I mentioned in the earlier post are men I consider that I am their Friend not necessarily that they believe they are my Friend.) as a man who walks through life with a true “Princess” could never sleep at night if he thought he also had friends!
I have always done my best and bought what my wife wants and really have few desires of my own!
Have been driving a BMW X5 (On our third and looking at our fourth) since 2004 when she asked for it! For you motivated Americans who love made in America the BMW X5 are only made in South Carolina!
Why would anyone work at all if not to enjoy the things it brings to you and your family!
Stealth Wealth is for cowards ashamed and fearful of their ill gotten gains!
Hiding your success and whispering in the shadows about what you truly have accomplished does nothing to inspire others to compete and achieve individual success.
If you earned it through honest hard work you likely feel like you deserve it and there’s should not feel unworthy to show it!
I have nice things and will never not buy what I or my wife desires as we go through life together!
The pandemic did not slow down any of our desired shopping!
In fact my wife was able to find better deals on her favorite brands and therefore saved us tens of thousands of dollars in final costs in comparison to the similar cost of similar items in 2019.
Revenge Spending is what I have always done although 99 cent generic cookies are still my most favored purchase!
My Brand Loyalties Are:
United States Marine Corps
Jim Beam
Coca-Cola
Hugo Boss
BMW X5
Gant
Oreo’s and Chips Ahoy’s
Quaker Oats
Levi’s
Chris
I’m with you on most of what you listed, but would suggest you investigate Levi’s support of anti second amendment organizations (I guess I’m assuming that as a Marine you would support 2A… I hope I’m correct).
Al Corrupt
Good morning
The Second Amendment is the only reason we still have a semi protected First Amendment!
I have never owned a firearm!
But if ever a law is made to prevent or restrict Law abiding citizens from owning one I will acquire them for the defense of our American Right to Liberty!
Side Note:
All corporations who want to have unfettered access to the rising China economic juggernaut must first convince the Communist leaders that they are against the idea of American greatness!
Which means we would all be naked if we abandoned brand loyalty!
I just like the quality of the products not their political agendas!
Apparently “Hugo Boss”supported the Third Reich and I hate Nazi’s!
Remember the 70 plus companies that threatened to destroy the “Billionaire Owner” of the Washington Redskins”!
Make no mistake he was chosen for his stance on being an American believer! They all signed up because they wanted to signal to the communist their future commitment and loyalty in order to get their companies names onto the favored access list!
We are living in the new age of “China”!
The American market shares for all brands are saturated and can only shift minimally!
Freedom is becoming but a memory!
Looking at your list, I think I’ve already revenge spent on pretty much all of those items: house, hot tub, nest, car, fine food, home entertainment, air purifiers and appliances over this past year! I’d also add in home exercise equipment since we bought a peloton last april.
Since we have not gone anywhere in over a year (our last trip was the first week of february 2020), we have spent our going out/vacation money mostly improving our house. So far we have done:
(1) Replace the light fixtures and door knobs in our home that we have been meaning to do for the almost 8 years we have lived here. (this was about $1,000 all in)
(2) Installed a radon mitigation system; seriously, look at it, depending on where you live it may be a smart investment and its “only” about $1,000.
(3) Replaced the 30 year old skylights on the house (they were in rough shape and hadn’t failed yet, but were on their last legs).
(4) We are re-grading the front yard to be smoother and thus more usable for my kids to run around without worrying about tripping hazards. (this will be costly)
(5) New tires and brakes for both cars. This would be done anyway but still it was a big pandemic era purchase.
(6) Buying much better quality wine/beer. We usually buy decent stuff but as we are spending all our time at home/cooking for ourselves, this has been our big discretionary splurge.
That said, we are looking to, fingers crossed, go somewhere in 2022 and have started planning accordingly. If this does go forward, we will definitely be spending more money on that vacation than we otherwise would have simply because we’ve been stuck at home for the last year.
Michael,
What kind of system did you purchase for radon mitigation? what trade people do you hire to install such system? Is it effective?
Thanks,
Guy
Thanks for the post!
I started spending in December. I bought stuff I could have afforded anyway, but had been pushing out and questioning whether I really needed to spend the money.
– gut renovation of our guest suite
– final 4 new window replacements needed for our house
– pergola and cedar trees for the backyard
– materials for the last room to be renovated
– expensive baby and kid clothes- I know this is not necessary, but I gave in.
– Costco grocery delivery service
– cast iron pan
– more weights for our gym
I agree with investing in a great mattress and the Dyson cordless vacuum!
Love that you planted new trees! My wife and I ended up sponsoring and planting two magnolia trees in front of ou rental property as part of the Friends of the Urban Forest initiative in SF.
Can’t go wrong with new windows too.
My wife hasn’t bought a car since 2006, but now she has a baby Bronco on order with all the bells and whistles. But that’s not an expensive car and she just bought it because the mileage was getting high on the old one. She drives cross country alone sometimes and wants a reliable ride. So I’m not sure that expenditure really counts, its just coincidental. I flew private a lot for work and I much prefer big commercial planes, the safety record on small planes is much worse than the big jets.
Great article Sam, fun read.
When I finally started feeling a little comfortable financially, the first thing I bought as a better mattress – a Tempurpedic. I had been living on a $500 wafer for years and it felt great to treat myself. I sleep so much better – the investment was well worth it.
I agree now is the time to spend given that the stock market is overvalued and you can’t get more than 0.5% on your cash in an online savings account. I have finally taken care of some doctor appointments that I had been putting off and you know there’s a copay for everything.
I admit, I cannot seem to understand the value prop of a Rolex, unless you are in sales and need to show off for customers. And I like to dress nice. Just cannot for the life of me justify the cost for a watch when I look to my phone for the time.
Alex
Good Afternoon
Based solely on the portrait drawing I am assuming you are a woman!
If so and you really enjoy looking your best?
Take a look at the brand “Akris” they have an amazing and consistently progressive and professional (WOW!) product line!
Happy Hunting (Shopping)!
Separate note and completely unrelated to the above topic!
Hopefully as I see from your previous postings you are an individual who can debate a political disagreement with out getting to emotional?
So yes anyone who is being honest and non emotional would recognize Trump as a true moderate regardless if they hate his antics or having chose to run as a Republican versus a Democrat.
Had he run against Hillary Clinton in the Democrat Primaries that same year he would have been beaten by her because of the feminist who make up a large portion of the party!
He chose correctly to run as a Republican because most Republicans are not nearly as extremist as most democrats!
The media has effectively established false narratives for both parties so truly caring republicans are demonized while evil democrats are worshipped in a backwards manor so as to destroy our country from within!
This is the overall objective of the Liberal leadership of the Democratic Party.
Regards
Chris
I’ve met several of the criteria to allow me to revenge spend but I’m still in the wealth building stage so it would just feel wrong. What I do enjoy is spending on things to make our Airbnb homes more comfortable and aesthetically pleasing. I spend a bit more on the purchases than I have for my own home. I just tell myself that it’s an investment that will garner great guest reviews and more bookings. It’s always fun to sit back and take in the décor when it all comes together. But as usual, I turn to my husband and ask, “Why can’t our own house be THIS nice?!”
Leaving the frigid Midwest and moving to Avondale, Arizona. Spending 500k+ on a new build. When we were purchasing our lot, two other couples wanted it right after us! The agent said a lot of Californians are moving to Arizona.
This is a fun mental exercise to do right now! I’m going to combine revenge spending with making my dreams come true.
I recently wrote a book, which had been on my bucket list for years. My future plan is to move to Europe for a time with my partner once this all ends!
This is an awesome list, although now I feel dirty for not having a bidet. YET. Even just first class flights on anything cross country or international is well worth the splurge.
Take a shower only with paper each evening or take a shower with warm water each evening (+ soap). The choice is yours!
If you have a bidet and feel dirty, aren’t you doing it wrong?
Totally feeling ya on this revenge spending concept. Great bullet point lists to on reasons to and not to do it. And very smart on incorporating investment returns into figuring out how much to budget for it. I can’t believe we are still in this insane pandemic, but I’m glad that we’ve learned so much from it and have come a long way.
My revenge spend list mostly includes new clothes. I keep finding random holes in my pants and shirts lol. I found one just last night in a pair of pants. At least some of my fave pieces have gone past their length of service. So I don’t feel that guilty about spending to replace them.
It’s funny you should say that, because three of my hats are ripped in the front and two of my pants have holes all around the bottom. I guess I just love to wear clothes until they fall apart!
So I recently went on the College of William and Mary alumni store and bought some new gear. Yay!
Unfortunately I’ve accepted your argument that the safe withdrawal rate is 0.5%, so I can’t really think about splurging until I reach 200x my ideal annual spending, which will probably never happen.
Ah, chin up! The 10-year bond yield is at 1.35% now. Therefore, the FS Safe Withdrawal Rate equals the 10-year bond yield & 80%. Therefore, you can withdraw at a 1.08% rate. The FS Safe Withdrawal Rate is for withdrawal rates in retirement, not so much using it for a net worth target.
But if you want to use the FSSWR for a net worth target, you only need to accumulate 92.5X your annual expenses! Hooray for rising rates!
Haven’t bought a car in 12 years. I’ve been wanting a truck for ages. I sometimes earn extra cash by doing smaller reno projects for people, and I wanted a truck to make those jobs easier by giving me more space for tools, materials, etc
My wife and I came up with a plan to payoff our newly built home in 18 months. We each contributed to our retirement plans to get the max contribution from our employers, and have reached the point where we can easily payoff the mortgage. I am the worst at making big ticket purchases as I try to stay extremely frugal but I bought my truck (staying within 10x rule) and I am very happy I did.
Nice! I was just thinking how I don’t regret buying my 2015 SUV in December 2016. It has provided so much joy and utility for my family. It felt kinda bad paying so much in the beginning, but I got over it.
As time marches on, we tend to get wealthier. So these splurges become a smaller and smaller portion of our wealth.
It’s a fun article to read. However, I have been frugal all my life so it’s hard to change the habit and start splurging even though we have more than enough money to last us lifetime.
Frugality disease is tough to conquer! I hear you. Baby steps!
… I thought this was an april fool’s article.
A safer car??? That’s a depreciating asset! Perhaps a slightly used (1-2 years) depreciated safer car.
Flying private???!!! … it’s like I don’t even recognize you anymore.
Spending some profits on a better life is not allowed!
A safer car can be bought used too. That’s what I did.
Feel free to never spend any of your profits if you’ve got everything you need and are happy!
Article very timely. Just yesterday mentioned to my wife
about spending money on some nice trips and or one mth.
sabbaticals. Without missing a beat she says why not add that
to our down payment on another small office bldg. with a return.
Im scratching my head as I reply- we are in the top 2 percent
of NW and top 4 percent income earners in US. How much more money
do we need before we start spending it???So im ready for some revenge
spending to spread the money around….
Your wife has a strong money mindset! Very awesome actually.
Perhaps do both.
Related: https://www.financialsamurai.com/do-you-have-the-right-money-mindset-to-get-rich/
Another splurge is to renovate the house you currently live in. It’s a nice way to increase quality of life without having to move.
As usual, I found myself smiling while I read your latest post! Revenge spending… I think we did just that with our trade up on the new in October. Sam, if all else fails, you should sell hot tubs. I want now after reading your reasons to own one!
Trade up on the new *home in October. All the excitement of spending has me thinking faster than I can type!
Yes! I love hot tubs! I would be the greatest Hot tub evangelist the world has ever seen!
You might want to update your vehicles information. The reason that I can tell is it does not include Tesla!
I cannot buy Tesla the car because I own Tesla the stock! It better stop crashing too much more. I need to make 10X more to be able to buy a Tesla car.
Fun article and something my wife and I have been talking about recently. As miserable as this year has been because of fear, death and social isolation I haven’t saved more money, and made money in my entire life in a 12 month span. It is time to spend!
Totally agree on expensive food and mattress and kitchen appliances. Bought a double oven for the kitchen right before the pandemic, and was best money I ever spent. Always a big believer in a great mattress, and love our current one. On expensive food even if you spend good money on expensive food products still cheaper than eating in a restaurant. Love buying USDA prime meat and cooking myself. That piece of meat would cost 4 to 5 times what it would in a restaurant, and is cooked exactly how I want it.
Looking at traveling this summer and fall when anyone who wants a shot will have had it. The best part of vacation is the planning part, and since we haven’t gone anywhere in almost a year. Have a wonderful time in Hawaii great place to relax and for you to see family.
Gotta try the American Wagyu and Kobe Beef variety next if you love USDA prime. Many online stores carry them now eg Crowdcow.
Give it a try!
I keep trying to convince my self to buy a nice home (I live in Monterrey, Mexico). Nice homes are in the $300,000 range but yesterday we visited a friend in a lower income area, and the area was safe and decent small homes were barely $50,000. I could easily afford either home but the stingy in me keeps trying to keep me from buying either.
Any thoughts on how to start spending? I should add that I am retired and 60 years old with a decent pension and savings. My father was always cheap as well and my brother and I were raised that way so it is difficult to justify spending even a dollar or two. I do spend money on travel and within the past few years, have started to stay in much nicer places. We just got back from a 5000 km driving road trip to southern Mexico. Contrary to what you read in the news, there are very few people traveling within Mexico – nearly all are going to the famous beach resorts like Cancun and Cabo. We often had hotels to ourselves in some beautiful locations.
Honestly, No idea because I’m not sure about your finances. But I must say, having bought a larger, nicer house last year, I am very, very happy to spent more money on living.
If I, I have never regretted spending money on a nice place to live. Now that I have children, the return on living in a nice place has gone up even more. It feels good providing for other people, for more people.
My net worth is in the top two percent in the US so finances are not a problem. Being cheap is the problem.
I have scheduled a civil engineer to inspect the more expensive house this week. Hopefully that will get me closer to feeling more comfortable about the purchase.
Alan, if you are in the top 2%, why is it that you leave so many comments railing against the government trying to help other people who are struggling during this pandemic?
Wouldn’t you be more appreciative of your situation and want to help your fellow brothers and sisters instead?
I rally against the government because I see the waste and I understand that the huge deficits that are being created will ruin the future lives of those who you believe are being helped today. Please explain how our fellow brothers and sisters have been helped during this pandemic? The government has not even provided basic health care.
Sam,
I actually gave my answer more thought and I realize that my primary reason for rallying against the government providing assistance is precisely because I have been frugal all my life. I was able to get into the top 2 percent simply because I saved and invested my entire life. My parents taught me to be frugal and to this day my mother who is 86 still clips coupons and makes a grocery list based on which store has the best price. Much like I suspect you would not want your children to squander their inheritance, I do not want government assistance to be wasted. Yet how often do you see someone in a grocery line paying with food stamps and pulling out cash to pay for cigarettes, liquor, or worse yet lottery tickets? The system should not reward bad behavior.
Thanks for expanding.
Would you rather be you? Or the guy on food stamps?
I think we should feel grateful and blessed to have achieved the net worth we have. Not everybody is as lucky. And given we are grateful, it is natural to take action to help other people improve their life situation as well.
Therefore, I do my part in paying my taxes and helping people figure out their finances. Taking action feels good.
I agree that taking action feels good and I completely agree; I also appreciate that you try to help people figure out their finances.
However, we will have to disagree on the government’s part. This article was about revenge spending and unfortunately those working class families that you so much believe the government should assist are the ones that “revenge spend” via debt and are most likely to utilize paycheck loans, furniture rentals, used car lots, etc. I can totally understand providing health care and food during a pandemic but rewarding poor financial behavior should not be part of the equation.
And just today I read that it is now thought that over 200 billion dollars of unemployment benefits may have gone to fraudsters. Why should you and I have to pay for this fraud? Those politicians who write the laws should be personally liable for damages but of course they never will be.
Fun article. Felt good to read about things I could buy once FI is accomplished. We already splurged on a double oven unit that will be coming a few months from now. That will likely be the most revenge spending we do.
Hahaha. I am going to revenge spend by taking a 3 week road trip this summer. We are staying at a couple of beach houses and trying to create some epic memories for our kids.
Next up would be buying an investment property if/when there is a downturn in the local market.
Perhaps I’ll also buy a web property or two as well?!?
Online real estate is the best type of real estate to buy! But that is an investment, not a revenge spend splurge.
Trying to revenge spend into a new house (again, probably not revenge spend, but instead a sweat equity play). DC inventory is SO LOW!! I definitely have HOT TUB on my list once I get the new house. I am going to get the “eternity” tub, where it’s a hot tub, and a swimming pool that shoots jets in one direction so you just keep swimming. Like a treadmill for swimming. Cannot currently do that at my rental, as I would have to build a cement slab for it, and then also, not sure where I would end up next. Do you use “salt water” in your tub, or how do you deal with the chlorine and getting in the tub 4X week?
I’m all for splurging and releasing the pent up demand that is brewing inside all of us. However, I think the items you listed are a bit too expensive haha! I completely agree with the mattress purchase though. Having the right mattress will permanently change your life for the better. Memory foam mattresses just don’t work for some people!
I am looking to spend a lot of money once the coronavirus pandemic is over and I can unleash the inner savings that I saved up. I usually spend $500 a month on fun but now… the pandemic made that impossible. I’m lucky if I spend $100, if that.
Pent up demand is real and if it’s affecting a frugal person like me, there’s no way it doesn’t affect the average American 10x more.
I really enjoyed this article!
Great and timely article Sam! I love the term “revenge spending” and just bought a new mountain bike for some killer adventures out here in rural WA. I’m also buying, wait for it – a new AWD vehicle since my 1996 Explorer 4×4 is beginning to fail. Saving is simply deferred spending and now I’m gonna revenge spend somebody of it for greater fun, adventure (and safety)!