# Saving is everything



## pepperoni (12 August 2008)

For me anyway .. I could very easily have nothing if I lived it up but I have the first dollar I earned and think its a good thing.

But I grew up in a saving house which helps.  And I love it which also helps.

In fact I think I love saving as much as the spenders love having their flashy stuff. I probably love aldi as much as they love gucci. :

Thats it really ... anyway here is an article on the topic.


What's the Point of Investing?
By Dr. Steve Sjuggerud
April 11, 2008

"Nice to meet you... Hang on a sec... Let me text my husband."

My wife and I stand there waiting. The girl busily taps out a text message on her new iPhone.

She's not so quick with the typing, but we know what's going on... She's just showing off that she owns a $500 phone – hot stuff in rural Georgia. 

We saw her arrive... She drove a black Suburban of some sort, with enough chrome to make a Detroit drug dealer blush. 

She and her husband are young... probably in their late twenties. He's apparently a builder in Georgia. Of course, homebuilding in Georgia died about two years ago... But even though their income must be down, their spending hasn't changed.

This young couple isn't the only one out here sporting an iPhone and a blingy black Suburban. What's going on here?

Me? I don't have an iPhone... Or a blingy Suburban... But I probably have one thing these conspicuous consumers don't: The house I live in is fully paid for.

I handle my money differently. I could buy an iPhone or a Suburban tomorrow. I wouldn't need a penny of debt to do it. But I won't... Why? Because I know those things won't make me the slightest bit happier. I'd be the same dolt I was before... only now, I'd be $50,000 poorer!

It took me a while to get to this point in my life. But I'm glad I made it... I'm at the point where I can buy what I want. But I don't. It's an important point to reach. 

I don't try to keep up with the Joneses. I'm doing the opposite, actually. I'm downsizing. I'm reducing my "stuff." 

Think about this... What good is all this stuff, really? You can't take it with you when you die... Doug Casey, the legendary newsletter writer who joined us last week on Jekyll Island, says it best:

"I've never seen a hearse with luggage racks."

Doug is extremely wealthy, and has been for a while. But he didn't arrive at Jekyll Island in a blingy Suburban, and he wasn't chatting on an iPhone.

My friend Bob Bishop is a wealthy guy like Doug. Bob wrote the excellent Gold Mining Stock Report newsletter for a few decades. He recently retired. Bob decided to sell some of his extraordinary possessions... for no particular reason I could see. He didn't need the money. And they weren't really taking up space. I asked him why he was selling. He said:

"After a while, you don't own your stuff... Your stuff owns you. Steve, you're young... so you're probably in the accumulation phase. Me? I've been there. Now I want to downsize and simplify. I don't need all this stuff."

Bob can buy anything he wants. But, like Doug, he doesn't drive a blingy Suburban, and I doubt he's got an iPhone. It's just stuff!

This brings me to the point of this essay... What's the point of saving money anyway? What's the point of investing?

When you get older (if you're not already older!) just what are you going to buy with that money you've saved?

Jonathan Clements gave a good answer to this in his farewell column for the Wall Street Journal this week (Clements has written more than 1,000 columns for the Wall Street Journal).

Clements says your savings "can deliver three key benefits." Even better, he says, "You can enjoy this trio of benefits even if you don't have great wads of cash." Here's how:

1. If you have money, you don't have to worry about it. 
2. Money can give you the freedom to pursue your passions. 
3. Money can buy you time with friends and family.

When I think about it, these three things are exactly what Doug and Bob are doing with their lives. The great thing is, it doesn't (usually) take millions to spend time with friends and family or pursue your passions. You don't need a fortune to live well.

But in order to get there, the Georgia homebuilder couple needs to skip out on his and hers blingmobiles.

The quicker you grasp this about saving versus spending, the quicker you'll be able to start living like Doug and Bob... even if you don't have many millions in the bank.

It's Uncomfortable, But You've Got to Do It 

You might think it's hard to stop buying ultimately useless stuff... You might think it's hard to stop keeping up with the Joneses. 

But actually, it is quite liberating... And even better, you'll be financially free much quicker. So give it a try... 

Good investing,

Steve


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## theasxgorilla (13 August 2008)

pepperoni said:


> In fact I think I love saving as much as the spenders love having their flashy stuff. I probably love aldi as much as they love gucci. :




I reckon you'll like it even better in Germany, where they sell wine, beer and spirits from the same establishment.


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## Fishbulb (13 August 2008)

savings ftw (for the win)


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## pepperoni (13 August 2008)

theasxgorilla said:


> I reckon you'll like it even better in Germany, where they sell wine, beer and spirits from the same establishment.




Ive been to one ... wine from chile and wherever for $1 a bottle!

The only thing better than $1 wine is free wine.


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## white_goodman (13 August 2008)

pepperoni said:


> Ive been to one ... wine from chile and wherever for $1 a bottle!
> 
> The only thing better than $1 wine is free wine.




or $1 champagne


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## professor_frink (13 August 2008)

Love cheap crap from Aldi

Cheap booze from Dan Murphy's will have to do for me at the moment, but  I'd be all over $1 bottles of wine at Aldi given half a chance


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## pepperoni (13 August 2008)

I have a tv from there ... probably cost about $100 and its bullet proof.

I even got a watch from there for $15 ... looked very nice ... i used to show it around and tell everyone I got it from there.  The rolex wearers looked down at me ... and I looked down at them.

People would even bring me the aldi catalogue at work!

I guess Im a candiate for tightass tuesday.


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## professor_frink (13 August 2008)

pepperoni said:


> I have a tv from there ... probably cost about $100 and its bullet proof.
> 
> I even got a watch from there for $15 ... looked very nice ... i used to show it around and tell everyone I got it from there.  The rolex wearers looked down at me ... and I looked down at them.
> 
> ...




can't say I've ever bought a bigger ticket item from there before, though it's good to know they aren't garbage.

Have you found many items from Aldi that you wouldn't buy again? Mrs Frink tried the shampoo and only used it 2 or 3 times before chucking it out, she wasn't a fan of that at all! That's made me a little wary of buying those sorts of things now.


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## pepperoni (13 August 2008)

professor_frink said:


> can't say I've ever bought a bigger ticket item from there before, though it's good to know they aren't garbage.
> 
> Have you found many items from Aldi that you wouldn't buy again? Mrs Frink tried the shampoo and only used it 2 or 3 times before chucking it out, she wasn't a fan of that at all! That's made me a little wary of buying those sorts of things now.





Have only bought 2 or 3 things there .... just love bargains.

Shampoo is really you get what you pay for ... my missus pays $$$$$$$$ for pantene but cant get the quality for less.

My friends have 6 kids .. they ALWAYS shop at aldi.

In germany aldi carries everything ... Id shop there all the time if they were here.


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## gfresh (13 August 2008)

I can say their coffee is blerk, tastes like rubber.. Maybe the beans get mixed up with a nearby rubber plantation? 

I am not a big spender, but sometimes it's good to have a good few niceties. My 50" TV was worth every cent - I got by with $200 specials for long enough. I am sometimes surprised that people don't spend a lot on what they use many hours a day.

I had a phase where I thought having a good car was important, but I think now it's one of the best ways to waste money. It's a guaranteed depreciating asset, yet people will spend $10's of thousands on them. As long as it's reliable, you can save thousands a year which can be spent on other things, or investment. For me, ego takes the back seat. That's the only reason I can think of for having a flashy car.


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## professor_frink (13 August 2008)

pepperoni said:


> Shampoo is really you get what you pay for ... my missus pays $$$$$$$$ for pantene but cant get the quality for less.




So does mine....now


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## white_goodman (13 August 2008)

is aldi a bulk type store? is there any bulk style supermarkets in sydney?

i ask cos i eat a lot of food... maby 4kgs of red meat and 1kg of eggs, 2kg of chiken etc a week.... might make the shopping bill a bit cheaper


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## prawn_86 (13 August 2008)

I have to agree with Gfresh, while saving is important, I like to appreciate the finer things in life from time to time.

My mont blanc pens are collectors items and i love them. Every couple of months my partner and i treat ourselves to silver service restaurants, definitely worth it. Plus the other food we buy is always of high quality, as my partner is a good cook and likes nice ingredients.

The way i figure it is that we might die at any time so we might as well enjoy nice things now, within reason of course, and no debt for it...


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## blinkau (13 August 2008)

I think becoming a 'tight ass' has become somewhat popular. I find a lot of friends will shop at particularly cheap stores or do things in a certain way to show as if they are financially superior. They believe that in acting this way people will look at them and think 'what a smart person they must be rich' 

You see people with mobile phones +5yrs old who show them off and say it still works just like yours and I am saving money then they go spend $50 on text messaging for the month! 

I dont think you should rush out and buy a mansion, Iphone and a bmw to show off the same amount as I dont think you should get a 1980s camry a second hand nokia and a flat in the outersuburbs to show your financially savvy. 

I paid $90 for a book the other day and told I was crazy only to see that person go out and spend $70 on a grog that night. Its the same with investing they save all that money live financially savvy then put no thought into their stock selection and lose it. You may ask a simple question 'does that company have any debt' yet they cant answer it. 

Live in a way that you feel comfortable and don't look down at others because of the way they live. We are all different and I think people need to respect that.


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## Julia (13 August 2008)

It's about balance, isn't it?   To always be chasing the very cheapest price can be demoralising if it's not completely necessary.  It can also become an obsession.

When I was poor I was a very determined saver.  Only second hand clothes for quite a few years.   Bought budget food.  Didn't entertain.  Hardly went out.

But now that's no longer necessary, I buy what I want but don't waste money on what I don't find value in, e.g. a car.  Mine is 18 years old(!)
but it still has low kms and is trouble free.  Carries animals so gets full of dog hair and slobbers down the windows.  Don't want that in a new car.

I feel a bit sorry for people who feel obliged to make flourishes with expensive toys to boost their self confidence.


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## pepperoni (13 August 2008)

gfresh said:


> I can say their coffee is blerk, tastes like rubber.. Maybe the beans get mixed up with a nearby rubber plantation?
> 
> I am not a big spender, but sometimes it's good to have a good few niceties. My 50" TV was worth every cent - I got by with $200 specials for long enough. I am sometimes surprised that people don't spend a lot on what they use many hours a day.
> 
> I had a phase where I thought having a good car was important, but I think now it's one of the best ways to waste money. It's a guaranteed depreciating asset, yet people will spend $10's of thousands on them. As long as it's reliable, you can save thousands a year which can be spent on other things, or investment. For me, ego takes the back seat. That's the only reason I can think of for having a flashy car.





Agree ... Ive travelled heaps but staying in etaps in europe and motel 8 s in US.

I love cars more than anything and have had 2 new BMWs as company cars (never my own $$) and as nice as they were I may never again ... next car is probably a nice sensible mazda 3 or something.  I dont love exy cars that much and dont care to impress anyone.

If you stick to necessities the odd indulgence once or twice a year becomes chickenfeed.


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## pepperoni (13 August 2008)

white_goodman said:


> is aldi a bulk type store? is there any bulk style supermarkets in sydney?
> 
> i ask cos i eat a lot of food... maby 4kgs of red meat and 1kg of eggs, 2kg of chiken etc a week.... might make the shopping bill a bit cheaper





Im contracting for NSW govt ATM and got a call from an agent for costco from the US a few weeks back ... they want some land to build e huge super cheap warehouse in syd.  Cant wait!!!!


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## pepperoni (13 August 2008)

prawn_86 said:


> I have to agree with Gfresh, while saving is important, I like to appreciate the finer things in life from time to time.
> 
> My mont blanc pens are collectors items and i love them. Every couple of months my partner and i treat ourselves to silver service restaurants, definitely worth it. Plus the other food we buy is always of high quality, as my partner is a good cook and likes nice ingredients.
> 
> The way i figure it is that we might die at any time so we might as well enjoy nice things now, within reason of course, and no debt for it...




Have been to every 3 hat restaurant in syd over the years.  For less than $200 90% of the time ... they get you on the grog and the deserts.  You dont have to live on baked beans, just be sensible.

Went to bilsons this year ... one night ... probably $200 ... cant remember ... remember the oysters though 

All my chef friends eat at golden century ... 1 chefs hat and almost the same price as your local chinese!  Lots of top places that do BYO ... macleay bistro used to be one.  Tetsuyas even used to BYO if you arent afraid of looking "cheap".

Lots of great ways to eat out .... My fave now is vietnamese Pho for $10. Or a big freash sashimi lunch in Neutral bay for $10.90!  Fresh dumplings and noodles for $7.50 a pop in chinatown.  You can eat some of the best food out for not much.

Best of all you can cook a $50 main at home for like $8 if you learn.  Nice Chilean Pinot Noir for $9 that rivals a $60 bottle at Quay.


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## pepperoni (13 August 2008)

Julia said:


> It's about balance, isn't it?   To always be chasing the very cheapest price can be demoralising if it's not completely necessary.  It can also become an obsession.
> 
> When I was poor I was a very determined saver.  Only second hand clothes for quite a few years.   Bought budget food.  Didn't entertain.  Hardly went out.
> 
> ...





Yes ... start living chaep and very quickly its not necessary ... but once you learn to save you see the folly in wasting and never go back.

As for kids ... absolutely ... if I ever had them Im sure they will get picked on at school for not having every latest item ... but but not buying their love with $$$ you teach them not not need to impress others with "stuff".


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## pepperoni (13 August 2008)

one other big one i live by ... if it doesnt appreciate then pay for it in cash (or equivalent).  Dont go on big holidays or buy nice cars etc if you have to get into new debt!!!!!!


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## white_goodman (13 August 2008)

pepperoni said:


> Im contracting for NSW govt ATM and got a call from an agent for costco from the US a few weeks back ... they want some land to build e huge super cheap warehouse in syd.  Cant wait!!!!




can you reccomend them somewhere on the northern beaches or north shore... my monthly kangaroo food bill is like $120 atm...

also as a uni student i cant emphasise enough the powers of living cheap...

DFO and Berkenhead Point are a must for clothes, also ebay goes well if you can hunt a bargain... i got 5 shirts for $25 and 5 pairs of jeans for $25... granted i only wear 3 of each, its still $5 each. Also living at home still helps


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## prawn_86 (13 August 2008)

white_goodman said:


> Also living at home still helps




Damn you! Lol.

Most city people that i talk to take living at home for granted and dont realise how much easier it makes life financially. Having to move from the country means rent, bills etc etc that need to be paid.  

Must say i would do the same though if i could


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## fordxbt (13 August 2008)

home is cheap - i opted to pay the electricity bill once a quarter rather than weekly board! its roughly $35/week 
but i only reside here, food/transport/etc is extra


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## white_goodman (13 August 2008)

prawn_86 said:


> Damn you! Lol.
> 
> Most city people that i talk to take living at home for granted and dont realise how much easier it makes life financially. Having to move from the country means rent, bills etc etc that need to be paid.
> 
> Must say i would do the same though if i could




the best part about it is i get my own flat sorta...kitchen, lounge, bathroom,laundry,bedroom,courtyard.... its like my parents planned ahead for Sydney's high property values and us youngies not leaving the nest till mid 20's


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## pepperoni (13 August 2008)

white_goodman said:


> can you reccomend them somewhere on the northern beaches or north shore... my monthly kangaroo food bill is like $120 atm...
> 
> also as a uni student i cant emphasise enough the powers of living cheap...
> 
> DFO and Berkenhead Point are a must for clothes, also ebay goes well if you can hunt a bargain... i got 5 shirts for $25 and 5 pairs of jeans for $25... granted i only wear 3 of each, its still $5 each. Also living at home still helps




I grew up in bayview and collaroy ... they have Devvit meat for bulk at narra but not sure about the quality ... huge aldi at mall ... and a huge chilli basil stirfry at chilli club narra is about $12.

Not as many cheap eats out that way as in student areas of syd.

DFO *WAS* great ... I got 3 fred perry polos for about $20 each that have lasted years!  Not so good now.

Dunlop volleys *can* be fashionable shoes ... now in a few styles ... for about $20 ha ha.  I havent got them but got some merrel looking shoes for $60 instead of $250.  

People make fun of me not having 5 of each style of shoe ... I dont get it I can only wear one pair at a time.


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## pepperoni (13 August 2008)

Ok I just thought of the worst one ... EB games guarantee ... I buy a game and if I dont LOVE it I take it back for refund.  They are happy to ... its their business model ... probably played 100 ps2 games and loved ... 5 ... 2 second hand!


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## white_goodman (13 August 2008)

pepperoni said:


> Ok I just thought of the worst one ... EB games guarantee ... I buy a game and if I dont LOVE it I take it back for refund.  They are happy to ... its their business model ... probably played 100 ps2 games and loved ... 5 ... 2 second hand!




that would be all 5 GTA games available on PS2


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## pepperoni (13 August 2008)

white_goodman said:


> that would be all 5 GTA games available on PS2




Bwahahaha ... exactly!


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## theasxgorilla (13 August 2008)

pepperoni said:


> As for kids ... absolutely ... if I ever had them Im sure they will get picked on at school for not having every latest item ... but but not buying their love with $$$ you teach them not not need to impress others with "stuff".




It's a bit presumtuous to assume that spending money on things that are important to a kids image is "buying their love" or that this is even detrimental.  This is the world we live in.  I've seen plenty of people grow up to be well-adjusted kids who love their parents because they bought them a car when they turned 18, a good watch to celebrate a special event, or helped them with a house deposit, made sure they always had good clothes etc.

There are other ways to incent people and educate them into good habits, like the goverment does with some pension/super systems eg. you put in a dollar, we'll match it.  While I have reservations about where that other dollar comes from when the government is coughing it up, if the parents have a surplus (which they ought to if kids are to be convinced that they're worth listening to) why shouldn't it be spent on/in the family???

I've actually observed and become convinced that when you don't purposely put your kids in these kinds of uncomfortable situations they tend to respect you more and when you have their respect they're more likely to listen to your financial management wisdom.  It also helps keep families together, IMO.


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## ROE (14 August 2008)

Don't need to save and still have all the finer thing in life with plenty left over 

100% salary comes in 30%-40% goes to investing and saving and never ever get draw out and let it compound years in and year out. Never need to borrow a dim 


60% left over I spent on toys, iphone, gadget what ever I fancy when that money run out the same cycle repeat  end of the year I have 30-40% stack up some where without missing finer thing in life


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## pepperoni (14 August 2008)

ROE said:


> Don't need to save and still have all the finer thing in life with plenty left over
> 
> 100% salary comes in 30%-40% goes to investing and saving and never ever get draw out and let it compound years in and year out. Never need to borrow a dim
> 
> ...




Whatever makes you happy ... as long as you know how much wealth you are missing out on if you let that 60% compound for a while!

Depends on whether you have goals and what they are .... to quote an unlikely source, "they are trying to buy some gucci, Im trying to buy the mall"


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## sk8er (14 August 2008)

white_goodman said:


> is aldi a bulk type store?




Have you been living under a rock?


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## derty (14 August 2008)

sk8er said:


> Have you been living under a rock?



White must be under the same rock as me as the first time I ever heard of aldi is in this thread. 

I googled them and see that they are a Walmart like group. I live in the west now but manage to get to the eastern states a couple of times a year. When did aldi come to Austraila and who did they take over?


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