"When the assignments came, tentative at first, they paid a fraction of a full-time wage for someone of my age and training. But I was grateful. Material progress gives us the choice to trade our earning ability for more consumption, or more time. I had made mine, and found enormous joy in every day."
He takes lower paying assignments and has adjusted his lifestyle accordingly.
A lot of people on the thread seem to be missing this, but this really is the key point. If you want to keep your current lifestyle, going out to fancy restaurants three times a week, having two cars, sending your kids to top universities, etc you will of course need a lot to retire.
If you want to move to somewhere remote and work the land for food, then you don't really need much at all. My uncle did this in a remote part of Bulgaria - the house he bought cost less than $5,000.
The distinction is that you are working the land directly for your own benefit as opposed to working for someone else. If you're good at repairing thing, can grow and manage your own food stores, and live in a small enough house, you don't need to spend 40+ hours at the office working for someone else. You can accumulate enough money to pay for various things through odd tasks. It's an appealing lifestyle, but definitely not something I'd recommend for everyone.
Seriously. I have very similar feelings as him- that as a father I want to be home with my wife and kids as much as possible. Right now my work week is pretty close to 40 hours, and I consider that a big success compared to most people I know. But my career goal is working towards more flexible working hours, and hopefully less total hours with higher profitability. But it's a dream, and I'm not sure how realistic a dream it is.
"No one is stopping you from living in the mountains!" sounds like it's trying to be empowering, but how do you afford it? Then how do you come back into the job market ~5 years later and look attractive to potential employers?
How did he become the 2nd richest man? By figuring out how to take a larger share of productivity than the people working for him. And many of them are working 3 days a week, often different and unpredictable days, and they'd probably like to work more, because of that productivity asymmetry.
Where is the value in this article? The author tells us he likes to relax and so doesn't work full-time, therefore no one should.
Beyond stating the obvious of having more free time, he never really states any benefits of working part time. And he doesn't mention the hardships the undoubtedly come with it like lower salary and how they might be abated.
Overall, just feels like a brag about how great he is.
But you don’t have to listen to me, part-time mountain dweller and full-time maverick. Here’s Carlos Slim, the world’s second richest man: “We should be working only 3 days a week.” It is time, he says, for a radical overhaul of our working lives. We need more time to relax, for quality of life.
Quoting the world's second richest man as a backup to your argument (about working less), comes off as pretentious.
Those of us that work as hard as we do, want the same things, working less, enjoying life more, slowing down. Unfortunately, life is expensive. Our incomes have stagnated and our dollar buys less.
I'd love to only work 3 days a week, but at my current salary, I'd have to live in a tent with my family of 4 and eat ramen and the occasional squirrel.
> I'd have to live in a tent with my family of 4 and eat ramen and the occasional squirrel.
Or a "stone cottage in the Kumaon".
We've been trained to maximize the curve: could you live an albeit different life on 60% of your pay and work three days a week? Most of us work five days a week: why don't you work all seven days a week and make 40% more?
You haven't really considered the alternatives available to you.
A non-exhaustive list of possible solutions include: Do you have a yard or patio space? Start growing your own produce. Seeds are cheap and with a bit of time and love will pay you back forever more. Tomatoes, peppers and herbs will all grow well on a window sill. Potatoes, onions and garlic will all grow in a bag in the back of the pantry if you let them. You can multiply potatoes, onions and garlic quite easily.
A big bag of flour can be found cheap (Costco for instance), make your own bread/pasta. That way you can supplement your Ramen with nutritious meals without breaking the bank.
If you're in California (or somewhere else with a high amount of sunlight, which many HN readers appear to be) perhaps think about the option of solar panels on your roof to reduce your power bill (flyers and auctions are great places to find these cheap, Google will help you with installation and then you just need to find an inspector).
Actually look at everything you spend money on in a month and ask yourself if there's a cheaper way to get those things without costing you so much money... and really look for solutions, you'd be surprised what you can find with a bit of ingenuity/creativity.
How would you know I haven't really considered the alternatives to living cheaper?
I don't have a yard to grow vegetables. We live in an apartment. When we lived in Portland, we had a yard to grow vegetables but our monthly water bill was prohibitively expensive (we're talking hundreds of dollars every 3 months).
Costco has a yearly membership fee, which I think at a minimum, is up to $75/year.
I work full time and my wife is in school full time in another city. We have 2 children (I have 4 altogether) who are school age. How the fuck am I supposed to make bread and pasta? Our rent is just shy of $1400/month.
Buying solar panels? What do solar panels cost nowadays and how much is installation? I can't install solar panels in my apartment.
I don't have a car payment because our only car is paid off. Except for student loans, we are debt free.
Edited to add: The other huge expense for us now is healthcare. The cost of healthcare for a family of 4 is astronomical.
It sounds like you're unable/unwilling to consider relocating as a way to minimize cost. That's fine—everyone is entitled to live where they feel is best for them—but there are plenty of locations where you could get much more space, in a good location, for less than $1400/month.
What I don't understand, is the comment about relocating like it's like taking a walk in the park.
Have you taken a look at how expensive simply moving is? There's the rental truck or pod, there's first, last and security deposit for the new place. Sometimes there's a doubling up of rent. If you're moving to different cities, there's the price of gas or diesel for your moving truck. Not to mention the time and energy it takes to pack up and move.
Relocating isn't as easy as some people make it out to be....
I'd second this notion, having moved just about every year for the past 16 years, sometimes to different provinces and countries it's exhausting and can be extremely expensive. Sometimes you don't realize any savings from a move for many months or in some cases, years... and if you're unlucky, you don't realize any savings at all and in fact, hidden costs that you hadn't accounted for can end up costing you money or sinking you into a hole. So moving can also be a risk, sometimes, it's better the devil you know than the devil you don't.
Moving cheaply requires good timing, a handy amount of free labour (i.e. friends that own trucks and owe you favours or like you enough to help just out of the goodness of their own hearts), a little good luck, a keen eye on available real estate and good negotiation skills. Without all of these lining up, it's likely to cost a bit.
Moving cheaply can also be done if you don't have (or keep) much stuff.
A couple of years ago, I got divorced, so I wiped the slate clean. Everything I couldn't fit into my beat-up 4-door sedan got thrown/given/donated away. I then drove 2500 miles to start building a new life in a different region of the country (US) where I had a job waiting for me. Maybe $500 in reimbursable expenses for gas and a night's lodging, then staying at a by-the-week motel until I scouted the area made the transition relatively inexpensive.
For many people, the cost of moving is directly proportionate to the quantity of stuff they own. I cut costs on moving by ridding myself of 95% of my stuff, and have been purchasing what I need in my new location.
Sure, not having a wife, 2.5 kids, and a dog makes these kinds of life changes much easier. But the point of having less stuff is still valid.
It's certainly not easy. However, if you really want to pursue the lifestyle being discussed here, it's likely a necessity.
It's counter-intuitive, but often living frugally requires a higher up-front cost (such as buying quality, higher-priced goods that will cost less in replacement and maintenance in the long-run).
Buy right, buy once... a motto that seems to be lost on consumerism. Also, not only buy right buy once, but buy items that are easy to service and maintain with easily available quality parts rather than throwing things out and replacing them because of planned obsolescence.
Also, never cut corners on a job, it'll save you time and effort in the longer term. Do it right, do it once.
Do your research up front, it may seem like a lot of time, but it'll pay dividends in the long run.
I wasn't suggesting those are all the solutions to your woes. There are many creative ways to live and the solutions that are right for you aren't going to be the solutions that are right for everyone. Perhaps you're living the cheapest way you can in the environment you have to be in for the moment, perhaps the only creative thing you can do to live the life you want is to re-prioritize. Perhaps that is not feasible for the moment either. Only you know the answer to that.
Costco does have a membership fee which (I think you're right) is $75 a year, but you get an annual dividend out of that membership depending on how much you spend there. Over the course of your annual membership, it's easy to save way more than the $75 you spend between the dividend and because the cost per unit of goods are much cheaper for many things.
Solar panels can be expensive, it's a good idea to keep your eye on sales, flyers and auction sites to get great deals and only buy when you find a good deal. I have no idea how much installation would be where you live. Me and my father-in-law are both pretty handy and Google pretty much tells us everything we need to do to install them. All you need is an inspector. With Google you can pretty much do anything you can imagine with a bit of ingenuity.
Having an apartment is limiting, for sure. But even growing some produce in the window will save some money.
Making bread and pasta is easy: Flour, salt, eggs, water, yeast will see you through both. Having some basic ingredients in the house will take you a long way to being able to make whatever you want without having to pay retail for it, and it's thoroughly satisfying. Again, Google is your friend.
Congrats being debt free. That is a tough thing for many/most people to be able to say in today's economy.
I'm working towards this myself. Homesteading is an easy way to move in this direction without needing such riches. It's not as much work as everyone says - though the work there is, is mostly physical. Your math/programming skills will help immensely if you want to build and automate everything yourself, which will make your life even easier in the long run.
Your dollar buys much more when you grow all your own produce, dairy and meat. Seeds are cheap, a couple of cows, a couple of pigs and a handful of chickens will cost you far less than your annual meat/dairy bill and give you all the meat/dairy you could want indefinitely. The only thing that's prohibitive is growing enough wheat for flour - and only prohibitive from a space standpoint; but flour is cheap and making your own bread is easy. You don't need to live off Ramen and Squirrel. Rabbits breed like... well, rabbits and they're pretty tasty, cheap to keep, pretty hassle free and their manure is great for compost. Of course, slaughter isn't a pleasant experience, it's not all sunshine and light.
I'm just an average guy, with an average income working an average 40 hours a week with a family. If I can afford it, then I'd wager that a decent portion of HN readers can afford it too. Life can be expensive if you let it, but there are many ways to live cheap and have a fulfilling life.
If city life is too expensive for you to have a good work/life balance, you're living in the wrong place and working in the wrong job or working for the wrong company... unless you live to work, if you do, then more power to you.
I'm not arguing against homesteading and it's actually been a dream of mine. However, marriage and children has altered my reality in ways that affect my ability to create a homestead.
Here in the states, you still, at a minimum, have property taxes, utilities, car/gas, etc to pay for even if you want to live a homesteading life. I lived this way for a decent portion of my childhood. We had no running water and a 12 volt electrical system in the middle of nowhere in Northern California.
I've got a family too... I was your typical city dweller/consumer until very recently. I'm not saying that you have to give up everything that comes with city life, I'm merely suggesting get creative.
For sure taxes still need to be paid... do you have a spare room? Could you AirBnB to supplement your income? Could you reduce your utilities by switching up some stuff in your house? Perhaps it would be cheaper for a gas stove than electric? Could you put solar panels on your roof to sell electricity back to the grid? Could you get a bike and ride more places to use less gas? Would having septic save money on waste? Could you hang dry your laundry instead of using a dryer?
Not saying that all or any of those are feasible for anyone/everyone, just offering some solutions that many people overlook when they think they're stuck and unable to reduce their costs any further and these things can be switched up without changing your lifestyle much/any. Some of them have a (in some cases large) up front cost, but then your monthly expenses can be reduced significantly which reduces your longer term income needs.
...and I don't know how you lived without running water, that's something I just can't give up, along with my washer and dishwasher.
Living without running water sucked. We had to drive to town (another expense) to shower at the campgrounds for a dollar, three times per week. We also had to drive to a rest stop south of our town to fill our 50 gallon barrel full of water for the week.
Obtaining running water was the first thing we did but it consisted of hiring a well witcher, drilling for water, putting a well in, putting in a pressure tank and piping to the house. It was a major expense. We had gray water for a few years, but eventually had to put in a septic system when we ditched the outhouse and installed a toilet.
This is something I will need to consider shortly (off-grid build in the next year or two), I have much research to do on this first. I didn't realize Well Witchers were still used, I thought there was some scientific method and Well Witchers/Dowsers had been relegated to history - fascinating.
I'm not sure what they would use today for finding water. We're talking a good 30 years ago. On an interesting side note, I discovered that I had the ability to witch for water, which I've never really put to good use.
I've also had experience installing a catch box (there's another term for it that escapes me right now) in a creek and running miles of pipe always with a slow decent to gravity feed several holding tanks. A word of warning, bears are curious about the sound of running water through pvc pipe, so bury that pipe...
> I thought there was some scientific method and Well Witchers/Dowsers had been relegated to history
Nowadays a professional hydrologist is who you'd contract for the task. They will do a geologic survey and fracture trace analysis using data from satellite imagery, the USGS and related state agencies in order to identify fissures within the underground rock formations that are most likely to hold a suitably sized pocket of water with good recovery. Then they might conduct electrical resistivity tomography to directly measure and image the density of subsurface material to identify water pockets and narrow down good drilling spots. It's a far cry from the sort of thing that might be characterized as dowsing.
> Homesteading is an easy way to move in this direction without needing such riches.
Homesteading is a great way to work significantly harder for a lower standard of living.
> Your math/programming skills will help immensely if you want to build and automate everything yourself
Your math/programming skills will help a lot more by helping you exchange your labor for money, which you can then exchange for food, clothing, and shelter. Your average developer salary can buy you more and better food and goods than you can make yourself in a cabin in the woods.
If you prefer to spend 30 minutes a day collecting $6.00 worth of eggs and milk, that's a lifestyle choice, not a financial one.
> Homesteading is a great way to work significantly harder for a lower standard of living.
I disagree with the lower standard of living. My standard of living hasn't changed any. In fact my sense of well-being and satisfaction has increased dramatically. My peace of mind that I know where my food comes from, from beginning to end is immeasurable. I will agree that it was a bit of work to set up, sure, but most of it takes care of itself. It takes 60 seconds to collect the eggs each morning.
I also disagree with your labour for money purchasing better quality food. Most of the food you buy in the store and at restaurants is packed full of stuff that's bad for you (look at the world's obesity and allergy problems that are escalating every year).
Homesteading is not analogous to living in a cabin in the woods (contrary to common belief). You can live a modern life with modern amenities while growing/making your own food which is more satisfying and better for you. We still have running water, a flushing toilet, a dishwasher, washer, stove, TV, cable and broadband internet - and I still live within an hour's commute of work and still buy clothes and other goods. Without having to buy all our produce/eggs, we free up a few grand a year for other projects/vacations/trips/excursions/events. So counter to your argument that it's a lower standard of living, our standard of living has increased.
Of course, you can sit in a restaurant eating high fat food joining the rest of the sedentary obese population and call that "a higher standard of living" if you choose; or you can use your time at the gym or out running or doing other exercise to keep your calorie balance in check, to keep our bodies healthy which takes what? Half an hour, an hour a day? I used to be like this, living the high life, enjoying the luxuries, increasing the size of my pants and my hours of exercise as each year passed. I'm done with it. I spend less time doing physical activity homesteading, I'm eating more nutritious food and I'm losing weight.
The other plus is that knowing how to provide all that stuff for ourselves eases our burden on the rest of society having to provide it for us and when stuff goes wrong and there's a run on the grocery stores and shelves are emptied, us and our neighbours barely notice the difference.
In the US reducing your hours is often ever worse than just taking the fractional pay cut: part time jobs don't typically include benefits, so you end up with much less than 60% pay for 60% of the work. If it weren't for health insurance this would seem like a much more reasonable option.
> If it weren't for health insurance this would seem like a much more reasonable option.
If health insurance (or childcare or disability insurance, etc.) weren't tied to employment, this would be a much more reasonable option.
The first step towards more flexible work arrangements is to eliminate gap in taxes between self-purchased benefits and employer-provided benefits. This goes for everything from snacks to health insurance. It's silly and really an fairness issue (should the little guy needs a big employer to take care of him?).
Point is: Why do we work more when we have machines that do work? Aren't machines build to help us? Doesn't that mean we should have more time for ourselves?
The people who own the machines still charge for the products those machines produce for profit. Their profits have gone up, the retail cost of the products they produce hasn't gone down. Consumers still need to find the same money to purchase those products and so they still have to work to make that money.
Having machines doing most of the work helps nobody reduce their workload. All it does is make those that can afford to buy the machines to do their jobs have more time and/or long term profit. If you can't afford to buy a machine to do your job, there is no opportunity to reduce your income needs without reducing or finding more creative ways to provide for your material needs.
> the retail cost of the products they produce hasn't gone down.
I disagree, with almost anything that has both a handmade and a mass-produced version, the mass-produced variant will be cheaper - t-shirts, soap, mugs, suits, etc.
The society still needs a homo sapiens to intervene when the machine flashes "Unknown item in the bagging area", though.
Also, define "we". There used to be an entire substrata of people whose job was to pull the elevator to the right floor when requested by the customers entering the elevator. It looks like those guys are all finally relaxing somewhere on the beach now that we've invented automated elevators eith buttons.
I didn't get that at all. In particular, he lists several regrets that those dying experience about their lives. My impression is that many of those regrets stem from spending too much time on things that others, rather than the self, find important in life.
Speaking for myself, there was a time in my life when I wanted to create and raise a family, wanted to own a house, because that's what people told me I should do. Yet here I am in my 30s. I have a happy relationship that for various reasons isn't aimed at having kids or owning property. I rent an apartment in a co-op community which, while it certainly offers its own challenges, also brings rich memories that I may not have had were I living in my own house in the suburbs. I'm bootstrapping a software company, which is significantly easier without a mortgage and 2.5 additional mouths to feed. And I'm happy. I wake up when I like, put in 20 or so hours per week of real work, then spend time reading or exercising or working on fun projects. That's not to say I'm better than anyone else, and not everyone has the luxury to choose as I have. But I'd likely not be here, with the freedoms and lack of stress I have had I chosen the life others said I should, which is what I took away from reading this. And it's not all easy. Sometimes I look at those of you who are younger and have done more in your 20s than I could ever imagine, and question my choices. Then I realize that my life brings its own rewards, and it's good to externally be reminded of that sometimes. There are certainly plenty of other reminders that someone with my talents could likely be raking in lots of money right now if they pursued a different path, and sometimes those are hard to disregard. :)
Also, as someone who has chosen to not pursue the rat race, I often feel pushback and criticism from those who have chosen it, as if my choices directly threaten their own. If an article seems more boastful than maybe it should, perhaps it's a reaction against having one's personal choices questioned, dissected and ultimately put down by someone working 80 hours a week with a family to support and a mortgage to pay, attacking others with the Gaul to not have taken on those obligations. Again, nothing wrong with our individual choices, and I don't put anyone down for making them. I just often find that not everyone shares that view.
"Also, as someone who has chosen to not pursue the rat race, I often feel pushback and criticism from those who have chosen it, as if my choices directly threaten their own."
I might be the odd one here but I don't think this article was about the practicality of working part-time but rather a motivator. Here is the key point:
> When we were done, they took me to chai, and asked me about my life in the mountains, my time in theater. “I can also say ‘I want to go and live in the mountains.’ But who will let me?” one of them asked.
> “Remember this,” I laughed, “you need no one’s permission to be yourself.” When I got back, I read The Top Regret again—”I wish I’d had the courage to live a life true to myself, not the life others expected of me.”
It is a weird coincidence that this is the exact debate I'm having with my wife right now. I make more than enough for us to live well and I'm trying to show her how wonderful her life can be if she goes part-time or quits her job. I've told her that she can finally do all the things she really wants to do - more time to spend with our newborn, joining mommy groups, more time to exercise, cook/eat healthier, time for hobbies etc.
She keeps coming back with her worries of future career prospects, financial problems in case I can't work, her prestige in her line of work etc. I counter with the fact that she was the valedictorian of her medical masters class with numerous open job offers with no expiration date, how we can buy sufficient life/disability insurance, how she can continue to work part-time or teach an advanced class or two if she wants to remain involved in her profession without a lapse.
For me, this would be the dream. I'd love to work half as much as I do but I can't because of finances. She CAN work half as much without worrying about finances but she is still afraid of the major change. Frankly, it is just too alien of a concept for her. I would never force her to pick a specific path so all I can do until she makes up her mind is to offer her suggestions and paint a picture of what life could be if she picked the unconventional path.
Sounds like maybe she should work full-time, because perhaps she wants to, and you should work part-time or not at all, as you clearly sound like you would prefer.
Hmmm. You're writing this as if being a stay-at-home mom is pure bliss. It's not. It is completely wonderful to spend a lot of time with your children. But it also has a huge cost in adult self-actualization and development. Some of that is completely silly (the way our culture values people who work more than those who don't, or who are experts at projecting a sense of workplace-type competence). But some is completely legit: striving and succeeding in the adult work world can also be rewarding and exciting. From our experience, looking after a kid leaves very little time for hobbies.
That finances thing is a pain... same situation here :-)
Of course it isn't. I've been consulting from home for past 5 years myself and there is good and bad in any option you pick. I keep bringing up part-time because of the self-actualization reasons. I am just saying look into non-full-time possibilities because being away from the baby all day is already stressing her too much.
We can't afford that at the moment for numerous reasons. Also I love what I do, she isn't married to her specific job, and she misses the baby a lot all day.
My point wasn't that I'm forcing her to make a major life decision because I prefer that for some reason. I was saying she has the ability to go part-time, she wants to spend more time with the baby, yet she is very concerned with making this change because it is a rare thing to do in medical field.
edit for s73v3r: She's already near the top of her field's salary range.
I don't know if part time is that rare a thing. My family has a couple of doctors who have the option of switching into emergency care / drop in clinic care etc. where they can decide how many hours to work. In fact their hours are way more solid than ours - they are usually done when they are done with their x hours and the pay is very very good as well. Do see if you can dig around more about the alternatives.
Perhaps you can rearrange and be the one to work part time while she continues doing what she enjoys doing. You are the one who wants this more than her, and perhaps you will both benefit better if each one did what they wanted.
He is basically saying you will have a fuller life, since you will have more time to experience other things.
I think many people work at jobs that are at best "just work" and at worst miserable experiences. I want more time to learn new things, help people, and do work that I am passionate about.
"Thoreau pitched his Walden in this key; he claps his wings and gives forth a clear, saucy, cheery, triumphant note ... the book is certainly the most delicious piece of brag in literature ... It is a challenge and a triumph, and has a morning freshness and élan..." - John Burroughs
Stories like this give hope to all those trapped, and existentially unsatisfied in the rat race.
The internet (and USPS, UPS and Fedex) are the most amazing of all human inventions. It lets us live like Thoreau at Walden with access to the global economy.
I've been doing just that for the last 8 months, and it saved my life.
I suppose many will take that as a brag. Kindred spirits will be inspired, and maybe, just maybe we will coalesce into a liberation movement, and join together to make escape cheaper and accessible for more and more people.
He never said 'without any money', from the tone of the article we can assume that he has already made all of the money he will need to continue his present lifestyle. This is simply another one of those articles promoting the idea that there's enough room for everyone in the top 1%.
Not sure if you're being facetious or not. If you're really interested in working part time then just ask. The worst your boss can do is say no. I've been part time on and off for 4 years and I've made the permanent move to PT 6 months ago, and I'm positive that I'll never go back to full time work. I was also unsure of how the conversation would go with my boss. It went something like this.
Try more drinking, social sports or travel, especially long distance cycling which forces you to meet many people from in-between places you'd normally never see.
Coming from a former super introvert, as sad as it may be, drinking is how I finally learned to be social. It totally forces you to meet and interact with people you otherwise would not. However, I still have my days where I'm 100% done with all of humanity. But, who doesn't?
Fellow introvert here. I find that on days I go to the office, I am just done dealing with humanity long before the end of the day. All of my energy and will to socialize is drained from me, and it's wasted on largely meaningless interactions not of my choosing. When I work from home or another quiet place, I'm much more likely to pursue social interactions in the evening.
Why assume he's rich? Maybe living in the mountains is cheap. Maybe he saved before moving there. There is some choice between working/consuming less and working/consuming more. He's advocating the former.
Well, he took a year long honey moon which he spontaneously decided to extend into 6 years. I don't think your average person could pull that off, regardless of how cheap it is to live there.
Also the fact that he literally doesn't address how he can afford to to this, which is the first thing on most peoples mind, also indicates that he is so wealthy he is out of touch with reality.
I don't assume he's rich. I assume he is a decent financial investor living in Delhi where a 3-bd apartment in the city is ~$700/mo. His reported annual compensation on Bloomberg is $105,000. While he may not be Warren Buffett rich, it's still substantial in India. I do assume that if he were living in the US at the same rate, he'd probably be working more than 3 days a week.
I understand he's advocating for less work. Why do you assume he's advocating for consuming less? He could be buying new Jordans for every run he goes on. His couch could be rhino leather for all we know. Personally, I doubt he's advocating for less consumption because he sits on boards of businesses who produce basic goods, like food, paper goods, and He also sits on a board for an event production and marketing company. It's hard for me to believe he's down with less consumption.
>I'd guess it's because it's a rich person saying it, which I get.
Rich people don't deserve to be rich, this is a fact. No single human has enough IQ or strength to contribute enough gdp to the economy as to justify becoming super rich. The rich build their wealth off the work of other people. We all know this in a sense and that's why we feel it's unfair.
However, fairness isn't what drives an economy forward. Capitalism works very well, wealth inequality is just an unfortunate side effect.
> Rich people don't deserve to be rich, this is a fact.
How can someone deserving (or not deserving) something possibly be a fact? Who decides who deserves something and who doesn't? Or is there an objective measure of deserving something, so that it may be a fact?
Regardless of whether or not I agree with you, your argument makes no sense.
>How can someone deserving (or not deserving) something possibly be a fact? Who decides who deserves something and who doesn't? Or is there an objective measure of deserving something, so that it may be a fact?
Maybe it's not strictly a objective fact because their is no quantitative measure, if this is how my statement is interpreted by most people then it is my mistake.
This does not mean that that the entire argument makes no sense. Many things in life cannot be objectively measured or strictly defined. We all as human beings have the intuition to judge whether or not someone "deserves" something or not even when I don't explicitly mention who does the judging. If I had said that "a murderer deserves to be punished, this is fact" would the argument still make "no sense"? No. It wouldn't.
Let me put it this way, unless you're a psychopath, I assume we all have the ability to judge who deserves and doesn't deserve something and that ALL our judgements will be remarkably similar if viewed from an unbiased perspective. That is why I can say such statements without explicitly stating objective measures.
If you're rich yourself I would say your judgement is remarkably biased and that you will take a more opposed or ambiguous view towards my statement about what rich people deserve. This occurs because people tend to almost always justify their own situation. This is a fact. Do I have an objective measure of this? No. Do I expect the average reader to be able to understand what I said despite lacking an objective measure? Yes.
It is true that any well-qualified specialist, at least any developer, could work 4-day 8-hour workweeks if they'd wanted. And do that while keeping a high standard of living. You might need to choose the city and area to live though, but that's all.
This is one of the shitty things about capitalism. Super rich people. They are free riders who get so unrealistically rich that they no longer need to contribute anything to the economy. They just sit on their asses, "grow" their wealth and develop perverted philosophies on life.
No single man on earth has the strength or intelligence to create an economic contribution that justifies this sort of wealth. The super rich achieve their wealth off the backs others.
Here's a different point of view: Carlos Slim has so far been relatively unable to compete in the US. Some people argue that he does well in countries like Mexico because in those places, he can run a monopoly (like his telecom company) or oligopoly with price fixing power, generating large margin at the expense of his customers (who don't have much of a choice in the matter). Thus, his business has plenty of reserves for things like 3 day workweeks - at the expense of the population, in exactly the zero sum game you describe.
But when you look at modern American billionaires like Steve Jobs or Bill Gates, they made their fortune by working intensely hard and smart in very competitive markets, and inventing or making available to the mass-market products that created billions of dollars in value. It can definitely be argued that a single individual can create billions of dollars of new wealth, and not on the "back" of others - there's a lot of very wealthy early Microsoft and Apple employees out there, and billions of dollars of value created for its customers over the last couple decades.
Not disputing the hard work, but at key points in Microsoft's history, they've held and exercised tremendous monopoly power, generating large margin at the expense of their customers.. Just like Slim's companies in some respects.
Right, but the difference is that their monopoly was in a created market, vs Slim's which is the definition of a bad monopoly (sole supplier of a utility). Their margin was the reward for the creation of something new, not taking a cut on a natural resource. But I agree that it's not black and white - companies lie all over the spectrum (you could argue that Slim is getting paid for the effort of putting out a telecom network in Mexico).
A clearer example is Google: it has an effective monopoly on search, but it's not because it has lobbied Washington to stop people from using other search results, it's because it was the best search engine, spread like wildfire, and kept the market ever since. People use Google not because there's no other (legal) search provider available, but because it's still the best way to find things on the internet.
Because of this instinctive understanding of the value created, it's much rarer to see Brin and Page criticized for their wealth.
I'm going to start off by saying that my initial comment on rich people not doing anything and being freeriders was mainly an angry comment directed at people like the author of this article. My mistake for not making that clear. There are certainly many rich people who work hard. Despite that, this does not mean that hard working rich people deserve their wealth... Onward:
>But when you look at modern American billionaires like Steve Jobs or Bill Gates, they made their fortune by working intensely hard and smart in very competitive markets, and inventing or making available to the mass-market products that created billions of dollars in value. It can definitely be argued that a single individual can create billions of dollars of new wealth, and not on the "back" of others - there's a lot of very wealthy early Microsoft and Apple employees out there, and billions of dollars of value created for its customers over the last couple decades.
I disagree. Those innovative mass market products may be created under the leadership of one hard working man, but it is fundamentally impossible for a complex product like the iphone to be entirely the work of one man. The iphone, the boeing 747, and many other complex projects can only be built with the expertise and labor of multitudes of people. Steve Jobs and Bill Gates cannot build such wealth without exploiting the labor of their corporate empires.
Capitalism didn't do so much on its own to create the conditions for the ultra wealthy - it's globalization that permits capital to expand and grow like cancers would metastasize. Great in theory, but there's some consequences like anything.
You could argue that they don't contribute anything personally (though I disagree, but let's go with your assumption). But you can't deny that their capital doesn't. Rich people don't just hoard their money in huge vaults for swimming in. That money gets lent out, donated, spent, etc. It is constantly churning in the economic landscape, going in endless loops, while essentially staying "unused" by the actual owner.
He did do the work, that's why he got so much money. Sure, you could argue that he did some less than stellar, perhaps unethical/illegal things. But for the most part, he did the work to gain that money. (Let's assume he stayed within the legal framework here. Because a lot of these discussions "claim" illegality, yet have no concrete example)
I am rewarded (as you put it) for having say $100,000 in my bank. I saved it, maybe did some projects, etc. That money is mine, are you honestly going to say that I don't deserve the benefit that money brings me? Sure, it's only $5000/year in interest, but the argument doesn't break down if the amount has more zeroes in it.
Edit: Not only does a lot of the discussion revolving around rich people claim illegality, it is implicitly assumed. Tried and convicted in public opinion simply by virtue of having a lot of money.
>"Did he? Or did he simply "lead" the people who did the actual work?"
Leading is a skill, and thus valuable, and so someone probably paid him to do the work of leading. Or are you going to just argue that "only making something of use is work". If that's the case, you obviously have a twisted world-view, and debating it is pointless with you.
>"Are you honestly going to say that you deserve the benefits you get for simply having that money more than someone who's actually doing work?"
Money represents the value I created to someone in exchange for it. So yeah.
>Leading is a skill, and thus valuable, and so someone probably paid him to do the work of leading. Or are you going to just argue that "only making something of use is work". If that's the case, you obviously have a twisted world-view, and debating it is pointless with you.
I agree. Leading is a skill. But leading is not a skill that justifies an astronomical portion of the pie. I would say between coding and leading, coding is a far more specialized skill that is harder to learn and find. In short, it is far easier to tell people what to do then it is to do it. This statement grossly simplifies what leadership and coding is, but the basic premise still stands.
Also you should note that the skills needed to gain a leadership position versus actual leadership skills are not congruent. There are many people in leadership positions who are bad leaders yet get unfairly high compensation simply due to their perceived rank.
This illustrates another problem in our society. We have a hard time identifying leaders. Leadership is perceived to be a commodity skill but I would argue that many people can do it. How do you know the janitor or garbage man if given the right opportunity can't be a great leader for a fraction of the price of current average CEO salaries? We don't know. But if it were true, then that means leadership is not a commodity skill and therefore not justified to be associated the extravagant compensation that is often paid out to people who possess such said "skills."
>Money represents the value I created to someone in exchange for it. So yeah.
No you don't. You may have earned the principal. But the growth was not earned by you. The growth is the direct result of employees within the company, if that's not you, then you don't deserve it.
This is true, but leadership skills are worthless if the people you're leading don't have the skills to do the work in the first place.
And again, you're going to claim that just having money means you deserver more of the reward than someone who actually put the work in to create something?
>"And again, you're going to claim that just having money means you deserver more of the reward than someone who actually put the work in to create something?
"
You're being obtuse intentionally. You have no intention of discussion, you just want to find a way to blame people getting benefit from money without some sort of labor (notably, your personal definition of labor). That is a twisted world-view, and one I have no intention of remedying in your head. Good day.
>I am rewarded (as you put it) for having say $100,000 in my bank. I saved it, maybe did some projects, etc. That money is mine, are you honestly going to say that I don't deserve the benefit that money brings me? Sure, it's only $5000/year in interest, but the argument doesn't break down if the amount has more zeroes in it.
The argument does begin to break down once the amount has more zeros in it. If you had 1,000,000,000,000 in the bank I would say there's no way you got that on your own. You had to work with thousands of other people in order to get that kind of money. Therefore it becomes debatable whether or not you deserve that capital.
>"You had to work with thousands of other people in order to get that kind of money."
Probably, yeah. In my example, the number might not be a thousand, but more like 1-2. How is it different?
Point is, you'll have to explicitly state the difference between the two. At some point there is a disconnect. And that leap needs to be addressed otherwise people will simply go on implicitly claiming that rich people don't deserve what they have, or didn't acquire it legally, etc.
The return on capital is a function of risk. The VC who puts $1m into a company assumes all the risk for that money - if the company fails, or the owners don't execute, or the legal landscape changes against them, or a competitor comes up with a better product, that VC is out his $1m. No takebacks.
The wealthy who invest their money are, in fact, assuming some degree of risk that they can afford to absorb, while their investees have time and talent, but would be completely ruined by a failed financial bet of similar size.
Yes, I did. The answer is "because they are assuming risk so that other people don't have to". None of those risks fall on people actually doing the work - their future jobs are at risk, but they'll have been paid for time and labor spent. They will have been compensated for their input, even if the company ultimately fails.
By comparison, the investor who invests capital has no guarantee of compensation for his input; he eats the risk inherent in the venture, in exchange for a return on his investment if it succeeds. If it fails, he is out of his input and has not received any compensation for it. That is a level of risk that many people can't take.
Lenders, likewise, assume risk of default. It is not the act of having money which is rewarded - simply sitting on a large pile of cash doesn't magically spawn more money. When money is lent to other people, the lender assumes the risk for the loss of that money - the beneficiary of the loan may not pay that money back. Interest charged is payment for assumption of that risk.
We've not yet even touched on the fundamental aspect of the capital economy - mutually-beneficial exchange. Those employees that work for the startup that ends up making the investor a ton of money? They've gotten jobs and compensation that they wouldn't have otherwise. Nobody willingly and rationally enters into a transaction that doesn't provide benefit to them over the available alternatives; if it was not better than the alternative to take investment or a loan, then nobody would do it.
Setting reward as a function of risk definitely makes things seem more fair when viewed from that perspective. However, their are many super rich investors who deploy their capital into assets that are low risk, and just sit on it while it grows compounding 7% every year. When this happens it is no longer fair, it becomes a form of exploitation.
"Low risk" is not "no risk". I mean, heck, look at 2008. People invested in index funds - frequently considered one of the lowest-risk, most stable stock vehicles - lost 50%+ of their invested value in a hurry.
It grows compounding at 7% year-over-year because it's invested in companies and people that are growing their own businesses because of it. Money doesn't just grow on its own; capital accounts don't accumulate by virtue of their own gravitational pull. The degree of risk doesn't really change the fact that that capital is risked as investment hopefully helping other people succeed, rather than just sitting in a Scrooge McDuck swimming vault somewhere. You can still lose it, and it has to be somewhere that someone else is using it to produce wealth in order for your own accounts to grow.
>It grows compounding at 7% year-over-year because it's invested in companies and people that are growing their own businesses because of it. Money doesn't just grow on its own; capital accounts don't accumulate by virtue of their own gravitational pull. The degree of risk doesn't really change the fact that that capital is risked as investment hopefully helping other people succeed, rather than just sitting in a Scrooge McDuck swimming vault somewhere. You can still lose it, and it has to be somewhere that someone else is using it to produce wealth in order for your own accounts to grow.
This is my entire argument. Lets not consider risk for a moment... If someone else is producing wealth in order for your accounts to grow and you as the owner of the accounts are the beneficiary of this growth then that means you are exploiting someone else's work. This is NOT fair.
Now lets take a look at the equation with your statement involving risk.
>"Low risk" is not "no risk". I mean, heck, look at 2008. People invested in index funds - frequently considered one of the lowest-risk, most stable stock vehicles - lost 50%+ of their invested value in a hurry.
Low risk is not no risk but does low risk justify extravagant returns? No.
If I have 20 million dollars in a stable fund that grows 10% a year, that means I get 2 million a year sitting on my ass. The majority of people in the US will not never even touch 2 million in their lifetime. You want to justify that kind of compensation by saying that index funds still involve certain risk?
Let's be real, bubbles pop and industries heal, the economy goes up in aggregate, and many rich people stay rich or get richer in extreme and extravagant ways that are grossly un-proportional to the amount of work they output.
> If someone else is producing wealth in order for your accounts to grow and you as the owner of the accounts are the beneficiary of this growth then that means you are exploiting someone else's work. This is NOT fair.
You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts!
> If I have 20 million dollars in a stable fund that grows 10% a year, that means I get 2 million a year sitting on my ass. The majority of people in the US will not never even touch 2 million in their lifetime. You want to justify that kind of compensation by saying that index funds still involve certain risk?
If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic.
> bubbles pop and industries heal, the economy goes up in aggregate, and many rich people stay rich or get richer in extreme and extravagant ways that are grossly un-proportional to the amount of work they output.
Bubbles pop (with investors in risky ventures/funds eating the brunt of that), industries heal (certainly not overnight, and during those recoveries, it is again the capital-holders who bear the financial burden), the economy does go up in aggregate (because it's not zero-sum, which is why laborers benefit even if the rich get richer), but are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it.
>You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts!
I'm not talking about venture capitalists risking and betting money on speculative private businesses. I'm talking about what a typical rich person does to preserve and grow wealth. They put it in stable index funds and live off the interest for the rest of their lives while contributing almost nothing to economy.
There is no beneficiary in the stock market. The money goes to another trader while the stock price reflects either speculation or corporate output. But that's besides the point, in a low risk index fund, a 20 million investment yields 2 million with no work while your average worker gets 50k annually for working 5 days a week. There is no fairness in this no matter how you justify it.
>If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic.
Your view of risk is very incorrect. No stable index fund goes to zero overnight. Worst case scenario you lose 90% of 20 mill overnight and you're still 2 million dollars rich. Even then in every case, your investment fund will eventually go back to and past 20 million over time. This has always been the case, historically, for the American Economy.
Ever hear of a 401k? Even though those are essentially stock funds, people put money in them for safety, not risk, these are the same funds rich people throw their money into.
Also your symbiotic view of laborer and capitalist is flawed. The laborer creates a 2 million dollar product and only sees a 100k annual salary, while the capitalist put in an investment of 100k annually and reaps the benefit of the 2 million dollars. If the laborer's labor is worth 100k then we're talking about different returns by a magnitude of well over 100% for equal investments. That's not symbiotic, it's parasitic because the returns are not not distributed fairly. Rich people justify this with "risk" but the risk is minimal; remember I'm not talking about the startup game, I'm talking about rich people and their low risk strategy to grow their money.
>"are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it."
You're telling me it's ludicrous to get paid fairly for labor contributed and that empirical evidence supports this? How about this? The laborer creates a 2 million dollar product, the laborer gets 1 million, and the capitalist gets the other million? That's way more fair than what we see in the real world. If there's an economist who thinks this is unfair I have to disagree with him/her.
>You could argue that they don't contribute anything personally (though I disagree, but let's go with your assumption).
That's a mistake on my part. My comment was directed more towards people like the author of the OP who are rich and do no work. That being said rich people cannot contribute anything more to the economy other than what they can produce with their own physical and mental labor. This is a fundamental limit, that is set by the laws of the physical world. Yet, paradoxically, the wealth of the super rich skyrockets past this limit.
This is because the capital they deploy into the world isn't generated by them. It's generated by the labor of the corporations they own. A corporation is composed of employees and this is the true origin of capital. The money rich people deploy and churn into the economy is capital "owned" by rich people the same way landlords "own", "redeploy" and charge rent on land; If you disagree, note that in the english language land and corporations are both referred to as capital.
No, capitalists are not "free riders". A big reason the average wage is much higher in the U.S. than in say India is that the amount of capital per worker is higher, making U.S. workers more productive. There is no capital without capitalists.
Then why have wages for US workers stagnated while wages for the ludicrously wealthy have skyrocketed, even though productivity per worker is far higher?
I never said capitalists, we're all capitalists. What I meant was excessively rich people can't just achieve wealth off of their own work alone. It is physically impossible for any individual to have the physical or mental power to generate that capital out of thin air. People must aggregate their labor in order to produce complex products like the iphone, the airbus or the great wall of china. Thus for rich people to be as rich as they are must have exploited or "free rided" from the labor of others.
But WE created this system, and most people seem to be quite happy with it. The system is so one sided, it is not even funny. And even within the system, not all top achievers is equal - the world's best surgeon is probably making a fraction of what the world's best boxer or movie star is making.
What would be the government+capital structure immune from producing a class of freeloaders?
Societies closer to communism tend to generate a large amount of kafkaesque government workers, whose goal is to complicate any process they control in order to ensure maximum benefits at minimal contribution to society.
Societies closer to socialism with healthy social nets and welfare systems tend to attract a large influx of constituents, whose plan is to game the system for maximum payout from the government, and countries with liberal immigration policies like Germany or France already have massive public issues with it to the point of political pendulum swinging to ultra-right parties.
It seems like any society has to make a rational choice about which freeloaders it's okay with, and at least try to align the incentives right. In the US we're okay with rich not working, but we gouge them via property tax, sales tax, taxes on investment income and estate taxes. It's not like having Paris Hilton working a full-time job would energize the US economy.
>It seems like any society has to make a rational choice about which freeloaders it's okay with, and at least try to align the incentives right. In the US we're okay with rich not working, but we gouge them via property tax, sales tax, taxes on investment income and estate taxes. It's not like having Paris Hilton working a full-time job would energize the US economy.
Doesn't matter how much a rich person works. Their "work" is in no way equivalent in value to their extravagant wealth. That being said, I see no better alternative to capitalism. Wealth inequality is an unfortunate side effect that is just a fact of life: it's unfair. What I don't like is when people try to justify their wealth as if they deserved it.
> Here’s Carlos Slim, the world’s second richest man: “We should be working only 3 days a week.”
So... why doesn't Carlos Slim, as chairman of several large companies, restructure them to be 3 day work-week environments? Surely as someone who is about the richest man on the planet would be able to have some influence in the companies he owns/manages?
"To a certain degree, Slim has been applying this train of thought to his own businesses.
According to the Financial Times, Slim's phone company Telmex has implemented a system where workers on a collective labor contract who joined the company in their late teens can retire before they reach 50, and can continue to work for full pay four days per week."
While he could probably be doing more, he is working on it.
Thank you. My question was intended seriously, but probably came across sarcastically. FWIW, it still feels like 'not enough', but if he is pushing things in that direction, that's definitely a good sign. I didn't see the linked article before.
Working for three decades continuously for one company in the prime of your life to "retire" (scare quotes intended) at 80% hours for normal pay is a pretty half-arsed attempt at addressing the spirit of the concept.
That strikes me much more as a policy to retain employees and stop competitors getting access to that wealth of experience more than anything else. I imagine someone whose been working for a telco (especially in Mexico where technology probably isn't cutting edge in many places) for 30 years is very valuable to the business, so stopping them leaving is important.
This is my thinking as well. As you advance up the ladder of business, you get some unexpected benefits. The higher I go, I feel the less "tough" I have to be, as those under me are being tough for me. I find the less overtime and "skill work" I have to do, because those under me are doing that. Compared to my younger self I'm much less stressed and just overall nicer to staff, clients, etc.
If I had some narcissistic level of tunnel vision I'd say I'm like this because I'm a good person - see how amazing I am? In reality, I'm only like this because others are suffering for me and the lack of suffering allows me to act a certain way. Slim doesn't seem to realize this, or like most public figures, makes public statements for his own political ends not out of belief (remaining likeable, etc). This was recently addressed by this great Atlantic article, "Why It Pays to be a Jerk"
Personally, I'm a little surprised we havent moved to a 6 hour work day. I feel between 3-5 no one is productive and leaving at 3 ties in nicely when school ends and gets you a couple hours of much needed sunlight and freetime/chores time/family time/exercise time. Funny how pro-family politicians never fight for more hours to spend with your family. I told myself long ago that if any of my little side-projects takes off, I'd make a real effort to implement the 6 hour workday. So far, no luck, but I feel its feasible. Most places I've worked at have a unwritten rule of no meetings and no "real" work after 3:30 or so. 9-1 seems to be when everything gets done.
But then those companies wouldn't be as profitable and he'd slip to being the world's 5th or 6th richest man... so why would he do that? Unless he replaced all his workers with robots reducing everyone to 3 days a week, and reducing their salaries accordingly.
also we can't all work 3 days a week because productivity improvements have not been passed on to workers by corporations. Which is how we come to have really rich people.
It's difficult in the current environment to work 3-day weeks, but the growing Financial Independence movement advocates a different strategy that gets somewhat similar results without requiring buy in from your employer: instead of working 60% of a "standard" workweek, work a 5-day week, but live off of 60% of your income, and retire in 22 years. You end up working much less than 60% of the normal 40-hour week over a 40+ year career, because you can front load your earnings such that you get a boost from the investment returns.
OK, so here goes: (all comments refer to the modal human being - yes, there are other ways of living your life, but this is how it works for most people)
1) We all have a fixed number of hours per day.
2) If we don't have enough money to pay for housing near the centre of a city, we lose a significant chunk of those hours commuting for work, shopping, cultural, entertainement purposes.
3) So we try to move as close to the centre of cities as possible, but
4) land in the city centre is constrained, so we are now in competition with everyone else to pay for central housing
5) So we try to earn more by working more, up until the extra hours worked are more than the hours commuting saved.
It turns out that at the moment, thanks to various regulations / societal norms in the western world, this changeover point occurs at about 5 days work a week (for higher-paying professions, you can get this down to 4, for lower paying it may increase up to 6, or even 7)
This pattern will occur until we can remove scarcity of all resources - whilst scarcity exists, we will always be in competition with our neighbours for those scarce resources, and we will have pressure to work more to obtain them.
Thankyou for reading this economic theory from someone who knows next to nothing about economics...
I'm a freelance software developer. I work "part time" in the sense that I work only 20 hours a week on paying projects. I could work 40 hours a week, or more even, but I choose to work only 20 hours so I can work on other things of my own design. I do not spend the time "in leisure", though I enjoy the work so much that it's practically the same thing for me.
The Bill Watterson quote drives me up a wall. I can't imagine doing nothing.
I live in Washington DC with my wife. I make slightly more than she does (though with taxes and her benefits it probably comes out even), and she made enough before meeting me to buy her own condo here in one of the most expensive areas of the country. I charge only about half of what other consultants with my experience and skill set charge. Neither of us makes six figures. Just shy, but not quite. Combined, our AGI was just under 200k.
By almost all accounts, we're "rich". We went on three international trips last year. We went on three other mini-vacations that were only possible because I can work from anywhere. I'm working two 40 hour weeks here this week and next, just so I can have a big chunk of extra cash that I can play with--I think of it as reverse-vacation, I get to choose to work more for spells of time. I'm buying a gaming laptop with it, and some parts for my desktop. I could afford it without the "overtime", but this way I don't even have to think about the budget. We also put in quite a bit of money to our retirement funds, and have excellent health insurance.
How is this possible? I know couples making $500k between the two of them that don't get to go to all the amazing places we go to, because they're constantly worrying about money. It's because, for the rest of the year, we live in our means. Three international trips was in our means. Computers and electronic toys whenever we want them are in our means. If they weren't, we wouldn't have done them. We pay ourselves first (retirement funds). We don't have a house larger than we need. We don't have multiple cars (I don't need a car, so we have only one. Our great credit has meant that it's nearly paid off after two years, at an APR that has been less than inflation). We aren't fashionistas, so we don't drop money on clothing all the time.
Long story short, we just don't go into debt. The only real debt we have is the mortgage on the condo. We work her travel mileage card, so most of our flights are "free", in a sense. We just don't overspend on recurring expenses.
A $350/mo car payment doesn't sound like that much more than a $300/mo car payment, but it adds up! That's $600 in one year that you could have spent on a graphics card, or on a longish flight, or on a nicer hotel, or on a rental car instead of buses.
A $2800/mo apartment rental doesn't sound like that much more than a $2500/mo apartment, but it's $3600 a year! That's a brand new, uber powerful gaming computer every year. And you don't even need to buy it every year.
The recurring expenses in your life are a lot more expensive than you think they are. They are a hell of a lot more expensive than most of the expensive, one-time purchases you'll want to have in your life. Who needs a large house? Who needs 4 cars in a household of 2 drivers? Who needs a gigantic minivan or SUV for one kid? My parents drove my sister and me around in a coupe for most of our lives, making us squeeze past the front passenger seat to get in the back.
Even if you're living alone, you could get a roommate, or an efficiency apartment. You don't need a lot of stuff. I'd like to get rid of some of my stuff, and I don't actually have a lot. What do you use on a daily or weekly basis? I submit that there is nothing you'd use on a monthly or yearly basis that you can't rent more cheaply than own.
Well, there is reducing consumption and then there is prioritizing consumption. I think we fall more into prioritizing consumption. We do make quite a lot more than most people in the country, say nothing about the world, and we spend it all (in different ways, including on our retirement), but how we spend it is important.
If you want to have a fun lifestyle, you have to cut your living expenses. Housing is pretty much everyone's biggest expense, which is silly because houses aren't "fun". I don't know anyone who has parties often enough to justify large living spaces. I do really like hosting parties, but I can do that in a park or a private room in a restaurant more easily than at home, and it's a hell of a lot cheaper than keeping a large dining room and living room all the time.
I also think of it as being brutally honest and pragmatic with yourself. You have to decide for yourself how you will live your life and not let other people's expectations decide for you. Want to be a literal rockstar? You can do it if you give up on the same sort of vacations your coworkers are taking. Don't want to give up on vacations? Admit to yourself you like vacations more than being a rockstar and give up on spending money on being a rockstar.
I think a lot of people distract themselves with spending money on things that they think they are supposed to want, but ultimately aren't actually what they want. For example, despite what they might say out loud, a lot of people really just want to sit at home and watch TV. That's absolutely fine. Just admit it to yourself and stop spending money on fishing equipment that you never use. Then you'd be able to sink the money into a massive home theater system instead, something you'd actually get to enjoy on a regular basis.
If you try to do both, you'll end up in over your head in debt and not getting to fish or have a big home theater.
We have friends who are trying to "do both" on travel and a large house. We have been to their place for parties twice in the last year. They've been to our place for parties twice as well. We didn't have quite as many people, but I think that also made for a better party. They don't make any more than we do, they are constantly in debt, it's ruining their marriage, and now she just got pregnant so their income is about to get cut in half. He just took a job he hates because they will need the money.
If my wife gets pregnant, our options will be to... stop booking international flights. And that's what we're planning on. We're actively planning on shifting how we enjoy ourselves to accommodate our means. Luckily, we both really like board games. I've personally put off playing games over the last few years so I could focus on travel, get the most out of it, then switch to gaming together when we settle down.
Whatever it is you do, do it completely. Don't half-ass two things, whole-ass one thing :)
A couple of days ago the current President of my country was asked what should one do if he had a hard time finding a job, finally got rather low paying job, but he'd still like to start a family. He answered without a shred of hesitation that such people should borrow money from somewhere, effectively becoming indebted to some bank for the rest of their lives.
It's a very common mindset, people are being trained to believe that living with a huge debt is a perfectly normal thing. It isn't. Just as you say all you need to do is to live within your means and rationalize your spendings a bit. It's surprising how many things can be "within your means", even with very little income, if you're willing to do some work on your own.
I was way poorer than I'm now for most of my life, but I was never indebted to anyone. Instead of borrowing money I've learned to live making around $200 a month. That's of course another country, another currency and another economy, but to put things in perspective: that's less than one tenth of average income here. I learned to fix things that broke, learned to make things of my own, learned to recognize when something is worth its price and when it's not. I'm almost 30 now; I earn twice the average salary now, but I still make (some) furniture of my own, I still repair things around the house myself and I still don't buy the most expensive things "just because".
I don't know about economy and such, maybe it really is beneficial for most people in the economy to borrow money and live way above their current means, but on a personal level taking on a debt looks like an economic suicide.
>> I don't know about economy and such, maybe it really is beneficial for most people in the economy to borrow money and live way above their current means, but on a personal level taking on a debt looks like an economic suicide.
If your view of a healthy economy is one that siphons money out of the working class and into the coffers of large corporations in an ever growing spiral of consumption, then yes, taking on debt "makes sense". If the amount of money being spent and the market capitalization of your largest firms are the only way a country knows how to measure its wealth, then it will clearly prioritize spending over all else.
Personally, I think a healthy economy is one that meets the needs of its citizens. Why should 150 million people be "stimulated" and "incentivized" to spend money they don't have to make sure they all have new iPhones so Apple gets richer? Wouldn't it be better for those people to save their money and spend it on things that are actually important to them? Half those people spending half that money in their home towns probably goes a lot further.
I was poor too, when I was a kid and entering my career. I fix stuff around my house, too. Why am I going to spend $1000 on a new TV when it's a $2 capacitor that is the problem? Maybe that's what it is. We don't trust a system that wasn't there for us. The modern era of data-fueled, giganto-corp protectionist capitalism is all about making sure the richest get their due before the rest of us.
Don't get me wrong, I believe in capitalism. It's how small businesses work. I'd much rather give my money to a local shop ran by people in my own community, people I know, friends even. I know I'm helping them out, they know they're helping me out. That's healthy.
Debt is a tool--a really powerful one. Leaving it out of your financial toolbox can be quite limiting and make it harder to achieve financial stability. Most people do so out of a vague unease about it, rather than a full accounting for their risks and opportunities.
Yes, taking on debt is a risk, but it is far from the worst financial risk you can face, because it is predictable and often tax-advantaged. If taken on for the right reasons, it can provide leverage to achieve returns that would otherwise be unavailable.
For example, using mortgage to purchase property when you are young provides more time for compound appreciation of your property. And at least in the U.S., people who earn college degrees when they are young have average lifetime earnings improvements well in excess of the typical student loan costs.
Most people don't take it for the right reasons. They take it because they've been told to. And they aren't doing anything towards enhancing their understanding of debt.
For example, lots of people will go into debt to go on international trips. We structure our travel on our credit card and pay it off right away because it pays us to fly again! But most people don't have that system in place, they run up the credit card debt and then take 6 months to pay it off. I just plain hate the idea of paying for something today that I used up yesterday.
And I don't think the emotional impact can be overlooked. Even if you can make an argument to me that it would be "smart" to carry a transient purchase as debt (and I know you're not going to try to, I'm just making a hypothetical), I'd still feel bad about it, and that bad feeling is going to have a real impact on my quality of life.
Before I was finally out of debt, I paid off my student loans before I paid off my car (when I had a car) because even though the APR was higher on the car, I could pay off the student loans sooner. It's a snowballing effect. It felt like an accomplishment and it helped me maintain my frugality.
Telling someone with $30k in credit card debt (I know several people like this, it's not that uncommon these days) that they shouldn't run a balance on their credit cards isn't helping them. You've not told them anything they don't already know.
But maybe they don't already know that they don't have to have a big house. That's the intention of my story, to try to jolt people out of their half-waking state. People aren't perfectly rational beings and it's probably stupid to expect them to be so. But there are simple rules of thumb that I think people can take to heart that will improve their overall outcome much better than telling them "you need to consider and be careful with the debt". People work much better with all-or-nothing measures, rather than measures that rely on subtlety and restraint.
It's probably why no-carb diets work out better than calorie counting. It's not because carbs are particularly unhealthy, it's that people can't constrain themselves to the small portions necessary to count calories while eating complex carbohydrates. I know I can't. So what makes more sense? To repeatedly fail at exercising restraint? Or to succeed at a slightly less efficient plan?
Even taking on a mortgage is most of the time a bad call for most people. They live in the house for 5 to 10 years, then move before they get even close to realizing the potential of the property. Then, instead of getting a similar-sized place, they get something larger, something that fits inside their paycheck. Even if they sold their previous house for a net profit, they just roll that over into the new house. The net effect is that they are constantly renting from the bank.
That only makes sense if the mortgage costs less than rent for a similar place. If it doesn't, it's smarter to rent a place and sink the difference into a fund for buying a place when it does make sense to buy. But most people aren't going to keep track of their finances like that.
The general form of the problem is poor understanding of personal finance. I just think that reflexively avoiding debt is more of a symptom of that problem than a solution.
For example, the idea that "taking on a mortgage is most of the time a bad call for most people" is just not supported by the data. About 65% of the homes in the U.S. are owned, and most of those are households that are financially stable. Even in the depths of the financial crisis, well under 10% of homes entered foreclosure each year (i.e. 90+% were stable). And there are national correlations between homeownership and positive things like income, academic achievement, lower crime, etc.
It's good for the economy in the short term because it brings demand forward (whether this is then repaid in more productivity in the future is the problem!)
Terrible for individuals though, brings untold misery.
this is such a great post, it should deserve to be on the top.
I see many bad comments in this topic but I believe you described an honest example of what it means to make good sacrifice and live a good life.
I am on the lookout for a new job, was searching for a remote one, and in italy it isn't as easy as outside (at least for now).
If I can't find anything suitable I'll seriously consider the part time option, and I wonder why it hasn't been taken into consideration up until now.
We are not our work, we are what we are indipendently of our work.
Work is a tool, sometimes to freedom, yes, but mostly to be part of this world, to allow us to experience the world, because that's what the money partly does.
I agree with you and with the article, we shouldn't work that much, and if we all worked less, it's also probable that even more people would have a job since we all work less.
Improving life and human interaction, living with the people we love, that's what really matters.
>> We are not our work, we are what we are indipendently of our work.
I don't know, I don't think it's necessarily wrong to "be your work." I'm sure a surgeon of a certain congenial disposition can be his work and it is a healthy thing. I'd hope teachers were wanting to "be" their work, though I also understand that they often don't get paid enough to do so.
I also don't want to tell anyone their particular lifestyle choices are "wrong". If you want to be a recluse and, IDK, collect stamps the rest of your life, if that is what you really get enjoyment from, more power to you. Just as long as you personally know what that is and that you're not going to become mayor of your home town because of it.
But you are right, by default one shouldn't "be" their work. It's a privilege to have a job that you love. Most of us don't have that privilege. We have to make our own way, and there's only a limited amount of time to do it. Don't get distracted with things that ultimately aren't that important to you.
Weigh the options, make an informed decision. People need to stop deluding themselves into thinking they can do everything. We can certainly do anything, just not all of it. You have to choose.
Yes, you got the point. I didn't want to draw a distinct line of good and bad.
If work gives you pleasure, a total one, it's more than ok to spend time enjoying it as long as this doesn't affect other parts of your life.
Everything could be summed up with "use good judgement" in these cases, but yes, in the end we have to choose.
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
Shouldn't the new technologies and inventions give us more time ? Then why do we work more despite having machines that do most of the work for us? What is the use of it?
So much negativity on this thread! I'd rather figure out what this guy did right and take steps to implement some of those things into my life. It's easy to take pot-shots at people and harder to admit that someone might have found a better/more interesting way to live than you.
Nobody likes negativity, especially on HN. But rather then explicitly condemn the negativity and be excessively positive for no reason, why not analyze why people feel negative?
Believe it or not, negativity can be justified. And although wealth is a controversial topic I believe that an innate feeling of unfairness that most people feel towards the super rich exists because it actually is unfair. This feeling of discontent has toppled empires and changed entire economic systems. It is worth it to explore this negativity rather than suppress it.
>I'd rather figure out what this guy did right and take steps to implement some of those things into my life.
It is not physically possible for everyone to live this way. No single man has the intelligence or strength to contribute enough GDP to the economy to justify such wealth. If you want to live like him you must exploit the labor of others. In short to be rich sometimes you must do things that will promote feelings of negativity in other people.
Lots of mocking going on in the comments, and I'm not sure why.
If you're a software developer in the first-world, you're making, what, $75k/year or more? If you spend wisely, you can live quite comfortably on $30k/year, at least before housing costs.
Personally, my plan is to work full-time for the next ~10 years, putting every dime above the $30k/year mark into my mortgage and my retirement fund, and cut back to part time after that---I'll own my house, and with a couple decades of compound interest, my retirement fund will be set, too.
Most people in our position won't do this, though---they choose a higher standard of living (a new car every three years, a house at the very highest end of what they can afford, etc.) over working less. If that's what you want to do, that's fine---but don't pretend it would be impossible for you to cut back.
That's what I get from the article: the author's suggesting you do whatever it takes (including living on less money) to work less.
What makes you think the only other option to your lifestyle is choosing a higher standard of living? I have 4 children from two different marriages. I didn't choose a higher standard of living.
Living off of $30k/year here in Oregon is a fucking pipedream for a family of 4.
I definitely don't know the circumstances that lead you to having 4 children from two different marriages, but was it someone else's choice to do that? I'm sure you wouldn't change bringing your kids into the world. I just had one and despite my costs and life priorities changing a lot, I can't imagine not having her! If your priority before having kids was financial independence, you probably would have made different decisions and held off on the kids and possibly the marriages, no?
No, having children was my choice. I'm speaking more about the assumption that the OP had with living a higher standard as the alternative to what s/he was doing and that you could live comfortably off of $30k/year.
I feel like most of the statements about how much someone can live off of, should be preceded by whether they're single and what part of the world they're living in..
Maybe because not everyone is a software developer in the first world, or they aren't making $75k a year, or they have other unavoidable costs (kids,parents,etc)
> If you're a software developer in the first-world, you're making, what, $75k/year or more? If you spend wisely, you can live quite comfortably on $30k/year, at least before housing costs.
You've hit me on the head. That's very much what I make, and I actually live on less than $30k/year.
It's not even hard. No smart phone, no cable TV, cook my own meals, old car, ride bike to work, enjoy simple things like walking and frisbee (free). I've saved enough in 4 years I'm on the cusp of taking 4-5 years off to go adventuring.
> If that's what you want to do, that's fine---but don't pretend it would be impossible for you to cut back.
I feel this resistance from people all the time. They will very quickly tell you they need their iPhone, cable TV, latte and new clothes weekly.
Our society has it's wants and needs mixed up. Once you fix that, it's easy.
One consistent counterpoint and life motto that I like to strive for is: don't spend valuable time doing work you don't like. There's plenty of happiness to be had working, and that passion can bring great joy. One doesn't have to lounge around or act on a whim to find comfort.
In particular, my wife works a "normal" 45+ hour work week at a job she loves. Every evening is filled with stories of her day, and she exudes happiness when she tells them. She also gets to challenge herself with real-world problem solving. She's always moving and thinking.
Now, do our jobs take us away from our other passions? Of course! We'd both rather be climbing mountains that sitting indoors. But, there are comforts of life that we've chosen to give ourselves. Those comforts come at a cost, either in time, location or money.
I'd argue that it's better to find what makes you happy and determine what the cost of that happiness is.
Interesting to watch how quickly people are dismissing this as something you need to be ultra-rich to pull off. You don't. If you're reading this, chances are you can do it.
That's right. You can do this.
I think my bill rate is pretty realistic for a developer, and I can more than sustain my family working four 8-hour days (so I do). You only need to make 25% more than the average joe to pull that off. And seriously, if you're a developer and you're not making >100% more than the average joe, you really need to go have a talk with your employer about the current state of the market. So yeah, all of us make enough to do this.
No need to scrimp. No need to be the CEO. The math just plain works out.
Incidentally, the author is right. Even taking one extra day off per week has had a huge effect on my quality of life and overall health. I get outside a lot more, play with the kids a lot more, don't seem to get sick at all anymore, and come in to each week completely fresh and actually missing work a bit. It's cool.
I still kick around the idea of dropping down from my current 4 day weeks to 3 or even 2 day weeks.
When you are starting your career, it's quite hard to work part time because of the lower wages and the peer pressure. With more experience, it's really worth reconsidering the balance between work and money.
The problem is that money is currently the universal standard for measuring success. There are many more dimensions to success and in fact, everyone should build their own model of what constitutes success, including things like spending time with your family, reading a good books and so on.
Carlos already made his money and now he just wants to enjoy it. There's nothing wrong with that. But that reality is not true for most people.
I am truly jealous of the people that have enough just to get by, spending most of their time outdoors, traveling and getting to know new people and cultures.
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[ 4.2 ms ] story [ 219 ms ] threadHe takes lower paying assignments and has adjusted his lifestyle accordingly.
A lot of people on the thread seem to be missing this, but this really is the key point. If you want to keep your current lifestyle, going out to fancy restaurants three times a week, having two cars, sending your kids to top universities, etc you will of course need a lot to retire.
If you want to move to somewhere remote and work the land for food, then you don't really need much at all. My uncle did this in a remote part of Bulgaria - the house he bought cost less than $5,000.
"No one is stopping you from living in the mountains!" sounds like it's trying to be empowering, but how do you afford it? Then how do you come back into the job market ~5 years later and look attractive to potential employers?
There are quite a few things that are stopping me from living in the mountains: rent, food, gas, car payment, insurance, to name just a few.
assorted directorships and chairmanships:
Chairman Teamwork Arts 2013 – Present (2 years)New Delhi Area, India Managing Partner Magic Mountain Investments 2010 – Present (5 years) Director Amrit Corp Ltd. 2008 – Present (7 years) Director Inlingua 2001 – Present (14 years) Director DFM Foods Ltd 2000 – Present (15 years)
nice if you can get it I guess
So, I suppose the real answer is "have relatives who can get you a sinecure as a director".
Why does everyone omit the number of hours Carlos is suggesting? Hint: it's not 8-9 hours.
Anyway, it's all cool, as long as he doesn't want to use any of the tax-payer funded public services.
Beyond stating the obvious of having more free time, he never really states any benefits of working part time. And he doesn't mention the hardships the undoubtedly come with it like lower salary and how they might be abated.
Overall, just feels like a brag about how great he is.
Maybe we should mail him and ask for a job.
Quoting the world's second richest man as a backup to your argument (about working less), comes off as pretentious.
Those of us that work as hard as we do, want the same things, working less, enjoying life more, slowing down. Unfortunately, life is expensive. Our incomes have stagnated and our dollar buys less.
I'd love to only work 3 days a week, but at my current salary, I'd have to live in a tent with my family of 4 and eat ramen and the occasional squirrel.
Or a "stone cottage in the Kumaon".
We've been trained to maximize the curve: could you live an albeit different life on 60% of your pay and work three days a week? Most of us work five days a week: why don't you work all seven days a week and make 40% more?
Yes. It consists of a tent, eating ramen and the occasional squirrel.
A non-exhaustive list of possible solutions include: Do you have a yard or patio space? Start growing your own produce. Seeds are cheap and with a bit of time and love will pay you back forever more. Tomatoes, peppers and herbs will all grow well on a window sill. Potatoes, onions and garlic will all grow in a bag in the back of the pantry if you let them. You can multiply potatoes, onions and garlic quite easily.
A big bag of flour can be found cheap (Costco for instance), make your own bread/pasta. That way you can supplement your Ramen with nutritious meals without breaking the bank.
If you're in California (or somewhere else with a high amount of sunlight, which many HN readers appear to be) perhaps think about the option of solar panels on your roof to reduce your power bill (flyers and auctions are great places to find these cheap, Google will help you with installation and then you just need to find an inspector).
Actually look at everything you spend money on in a month and ask yourself if there's a cheaper way to get those things without costing you so much money... and really look for solutions, you'd be surprised what you can find with a bit of ingenuity/creativity.
I don't have a yard to grow vegetables. We live in an apartment. When we lived in Portland, we had a yard to grow vegetables but our monthly water bill was prohibitively expensive (we're talking hundreds of dollars every 3 months).
Costco has a yearly membership fee, which I think at a minimum, is up to $75/year.
I work full time and my wife is in school full time in another city. We have 2 children (I have 4 altogether) who are school age. How the fuck am I supposed to make bread and pasta? Our rent is just shy of $1400/month.
Buying solar panels? What do solar panels cost nowadays and how much is installation? I can't install solar panels in my apartment.
I don't have a car payment because our only car is paid off. Except for student loans, we are debt free.
Edited to add: The other huge expense for us now is healthcare. The cost of healthcare for a family of 4 is astronomical.
Have you taken a look at how expensive simply moving is? There's the rental truck or pod, there's first, last and security deposit for the new place. Sometimes there's a doubling up of rent. If you're moving to different cities, there's the price of gas or diesel for your moving truck. Not to mention the time and energy it takes to pack up and move.
Relocating isn't as easy as some people make it out to be....
Moving cheaply requires good timing, a handy amount of free labour (i.e. friends that own trucks and owe you favours or like you enough to help just out of the goodness of their own hearts), a little good luck, a keen eye on available real estate and good negotiation skills. Without all of these lining up, it's likely to cost a bit.
A couple of years ago, I got divorced, so I wiped the slate clean. Everything I couldn't fit into my beat-up 4-door sedan got thrown/given/donated away. I then drove 2500 miles to start building a new life in a different region of the country (US) where I had a job waiting for me. Maybe $500 in reimbursable expenses for gas and a night's lodging, then staying at a by-the-week motel until I scouted the area made the transition relatively inexpensive.
For many people, the cost of moving is directly proportionate to the quantity of stuff they own. I cut costs on moving by ridding myself of 95% of my stuff, and have been purchasing what I need in my new location.
Sure, not having a wife, 2.5 kids, and a dog makes these kinds of life changes much easier. But the point of having less stuff is still valid.
It's counter-intuitive, but often living frugally requires a higher up-front cost (such as buying quality, higher-priced goods that will cost less in replacement and maintenance in the long-run).
Also, never cut corners on a job, it'll save you time and effort in the longer term. Do it right, do it once.
Do your research up front, it may seem like a lot of time, but it'll pay dividends in the long run.
Costco does have a membership fee which (I think you're right) is $75 a year, but you get an annual dividend out of that membership depending on how much you spend there. Over the course of your annual membership, it's easy to save way more than the $75 you spend between the dividend and because the cost per unit of goods are much cheaper for many things.
Solar panels can be expensive, it's a good idea to keep your eye on sales, flyers and auction sites to get great deals and only buy when you find a good deal. I have no idea how much installation would be where you live. Me and my father-in-law are both pretty handy and Google pretty much tells us everything we need to do to install them. All you need is an inspector. With Google you can pretty much do anything you can imagine with a bit of ingenuity.
Having an apartment is limiting, for sure. But even growing some produce in the window will save some money.
Making bread and pasta is easy: Flour, salt, eggs, water, yeast will see you through both. Having some basic ingredients in the house will take you a long way to being able to make whatever you want without having to pay retail for it, and it's thoroughly satisfying. Again, Google is your friend.
Congrats being debt free. That is a tough thing for many/most people to be able to say in today's economy.
I'm working towards this myself. Homesteading is an easy way to move in this direction without needing such riches. It's not as much work as everyone says - though the work there is, is mostly physical. Your math/programming skills will help immensely if you want to build and automate everything yourself, which will make your life even easier in the long run.
Your dollar buys much more when you grow all your own produce, dairy and meat. Seeds are cheap, a couple of cows, a couple of pigs and a handful of chickens will cost you far less than your annual meat/dairy bill and give you all the meat/dairy you could want indefinitely. The only thing that's prohibitive is growing enough wheat for flour - and only prohibitive from a space standpoint; but flour is cheap and making your own bread is easy. You don't need to live off Ramen and Squirrel. Rabbits breed like... well, rabbits and they're pretty tasty, cheap to keep, pretty hassle free and their manure is great for compost. Of course, slaughter isn't a pleasant experience, it's not all sunshine and light.
I'm just an average guy, with an average income working an average 40 hours a week with a family. If I can afford it, then I'd wager that a decent portion of HN readers can afford it too. Life can be expensive if you let it, but there are many ways to live cheap and have a fulfilling life.
If city life is too expensive for you to have a good work/life balance, you're living in the wrong place and working in the wrong job or working for the wrong company... unless you live to work, if you do, then more power to you.
Here in the states, you still, at a minimum, have property taxes, utilities, car/gas, etc to pay for even if you want to live a homesteading life. I lived this way for a decent portion of my childhood. We had no running water and a 12 volt electrical system in the middle of nowhere in Northern California.
For sure taxes still need to be paid... do you have a spare room? Could you AirBnB to supplement your income? Could you reduce your utilities by switching up some stuff in your house? Perhaps it would be cheaper for a gas stove than electric? Could you put solar panels on your roof to sell electricity back to the grid? Could you get a bike and ride more places to use less gas? Would having septic save money on waste? Could you hang dry your laundry instead of using a dryer?
Not saying that all or any of those are feasible for anyone/everyone, just offering some solutions that many people overlook when they think they're stuck and unable to reduce their costs any further and these things can be switched up without changing your lifestyle much/any. Some of them have a (in some cases large) up front cost, but then your monthly expenses can be reduced significantly which reduces your longer term income needs.
...and I don't know how you lived without running water, that's something I just can't give up, along with my washer and dishwasher.
Obtaining running water was the first thing we did but it consisted of hiring a well witcher, drilling for water, putting a well in, putting in a pressure tank and piping to the house. It was a major expense. We had gray water for a few years, but eventually had to put in a septic system when we ditched the outhouse and installed a toilet.
I've also had experience installing a catch box (there's another term for it that escapes me right now) in a creek and running miles of pipe always with a slow decent to gravity feed several holding tanks. A word of warning, bears are curious about the sound of running water through pvc pipe, so bury that pipe...
Nowadays a professional hydrologist is who you'd contract for the task. They will do a geologic survey and fracture trace analysis using data from satellite imagery, the USGS and related state agencies in order to identify fissures within the underground rock formations that are most likely to hold a suitably sized pocket of water with good recovery. Then they might conduct electrical resistivity tomography to directly measure and image the density of subsurface material to identify water pockets and narrow down good drilling spots. It's a far cry from the sort of thing that might be characterized as dowsing.
Homesteading is a great way to work significantly harder for a lower standard of living.
> Your math/programming skills will help immensely if you want to build and automate everything yourself
Your math/programming skills will help a lot more by helping you exchange your labor for money, which you can then exchange for food, clothing, and shelter. Your average developer salary can buy you more and better food and goods than you can make yourself in a cabin in the woods.
If you prefer to spend 30 minutes a day collecting $6.00 worth of eggs and milk, that's a lifestyle choice, not a financial one.
I disagree with the lower standard of living. My standard of living hasn't changed any. In fact my sense of well-being and satisfaction has increased dramatically. My peace of mind that I know where my food comes from, from beginning to end is immeasurable. I will agree that it was a bit of work to set up, sure, but most of it takes care of itself. It takes 60 seconds to collect the eggs each morning.
I also disagree with your labour for money purchasing better quality food. Most of the food you buy in the store and at restaurants is packed full of stuff that's bad for you (look at the world's obesity and allergy problems that are escalating every year).
Homesteading is not analogous to living in a cabin in the woods (contrary to common belief). You can live a modern life with modern amenities while growing/making your own food which is more satisfying and better for you. We still have running water, a flushing toilet, a dishwasher, washer, stove, TV, cable and broadband internet - and I still live within an hour's commute of work and still buy clothes and other goods. Without having to buy all our produce/eggs, we free up a few grand a year for other projects/vacations/trips/excursions/events. So counter to your argument that it's a lower standard of living, our standard of living has increased.
Of course, you can sit in a restaurant eating high fat food joining the rest of the sedentary obese population and call that "a higher standard of living" if you choose; or you can use your time at the gym or out running or doing other exercise to keep your calorie balance in check, to keep our bodies healthy which takes what? Half an hour, an hour a day? I used to be like this, living the high life, enjoying the luxuries, increasing the size of my pants and my hours of exercise as each year passed. I'm done with it. I spend less time doing physical activity homesteading, I'm eating more nutritious food and I'm losing weight.
The other plus is that knowing how to provide all that stuff for ourselves eases our burden on the rest of society having to provide it for us and when stuff goes wrong and there's a run on the grocery stores and shelves are emptied, us and our neighbours barely notice the difference.
If health insurance (or childcare or disability insurance, etc.) weren't tied to employment, this would be a much more reasonable option.
The first step towards more flexible work arrangements is to eliminate gap in taxes between self-purchased benefits and employer-provided benefits. This goes for everything from snacks to health insurance. It's silly and really an fairness issue (should the little guy needs a big employer to take care of him?).
Having machines doing most of the work helps nobody reduce their workload. All it does is make those that can afford to buy the machines to do their jobs have more time and/or long term profit. If you can't afford to buy a machine to do your job, there is no opportunity to reduce your income needs without reducing or finding more creative ways to provide for your material needs.
I disagree, with almost anything that has both a handmade and a mass-produced version, the mass-produced variant will be cheaper - t-shirts, soap, mugs, suits, etc.
Also, define "we". There used to be an entire substrata of people whose job was to pull the elevator to the right floor when requested by the customers entering the elevator. It looks like those guys are all finally relaxing somewhere on the beach now that we've invented automated elevators eith buttons.
Speaking for myself, there was a time in my life when I wanted to create and raise a family, wanted to own a house, because that's what people told me I should do. Yet here I am in my 30s. I have a happy relationship that for various reasons isn't aimed at having kids or owning property. I rent an apartment in a co-op community which, while it certainly offers its own challenges, also brings rich memories that I may not have had were I living in my own house in the suburbs. I'm bootstrapping a software company, which is significantly easier without a mortgage and 2.5 additional mouths to feed. And I'm happy. I wake up when I like, put in 20 or so hours per week of real work, then spend time reading or exercising or working on fun projects. That's not to say I'm better than anyone else, and not everyone has the luxury to choose as I have. But I'd likely not be here, with the freedoms and lack of stress I have had I chosen the life others said I should, which is what I took away from reading this. And it's not all easy. Sometimes I look at those of you who are younger and have done more in your 20s than I could ever imagine, and question my choices. Then I realize that my life brings its own rewards, and it's good to externally be reminded of that sometimes. There are certainly plenty of other reminders that someone with my talents could likely be raking in lots of money right now if they pursued a different path, and sometimes those are hard to disregard. :)
Also, as someone who has chosen to not pursue the rat race, I often feel pushback and criticism from those who have chosen it, as if my choices directly threaten their own. If an article seems more boastful than maybe it should, perhaps it's a reaction against having one's personal choices questioned, dissected and ultimately put down by someone working 80 hours a week with a family to support and a mortgage to pay, attacking others with the Gaul to not have taken on those obligations. Again, nothing wrong with our individual choices, and I don't put anyone down for making them. I just often find that not everyone shares that view.
great response
> When we were done, they took me to chai, and asked me about my life in the mountains, my time in theater. “I can also say ‘I want to go and live in the mountains.’ But who will let me?” one of them asked.
> “Remember this,” I laughed, “you need no one’s permission to be yourself.” When I got back, I read The Top Regret again—”I wish I’d had the courage to live a life true to myself, not the life others expected of me.”
It is a weird coincidence that this is the exact debate I'm having with my wife right now. I make more than enough for us to live well and I'm trying to show her how wonderful her life can be if she goes part-time or quits her job. I've told her that she can finally do all the things she really wants to do - more time to spend with our newborn, joining mommy groups, more time to exercise, cook/eat healthier, time for hobbies etc.
She keeps coming back with her worries of future career prospects, financial problems in case I can't work, her prestige in her line of work etc. I counter with the fact that she was the valedictorian of her medical masters class with numerous open job offers with no expiration date, how we can buy sufficient life/disability insurance, how she can continue to work part-time or teach an advanced class or two if she wants to remain involved in her profession without a lapse.
For me, this would be the dream. I'd love to work half as much as I do but I can't because of finances. She CAN work half as much without worrying about finances but she is still afraid of the major change. Frankly, it is just too alien of a concept for her. I would never force her to pick a specific path so all I can do until she makes up her mind is to offer her suggestions and paint a picture of what life could be if she picked the unconventional path.
That finances thing is a pain... same situation here :-)
My point wasn't that I'm forcing her to make a major life decision because I prefer that for some reason. I was saying she has the ability to go part-time, she wants to spend more time with the baby, yet she is very concerned with making this change because it is a rare thing to do in medical field.
edit for s73v3r: She's already near the top of her field's salary range.
I think many people work at jobs that are at best "just work" and at worst miserable experiences. I want more time to learn new things, help people, and do work that I am passionate about.
"Thoreau pitched his Walden in this key; he claps his wings and gives forth a clear, saucy, cheery, triumphant note ... the book is certainly the most delicious piece of brag in literature ... It is a challenge and a triumph, and has a morning freshness and élan..." - John Burroughs
Stories like this give hope to all those trapped, and existentially unsatisfied in the rat race.
The internet (and USPS, UPS and Fedex) are the most amazing of all human inventions. It lets us live like Thoreau at Walden with access to the global economy.
I've been doing just that for the last 8 months, and it saved my life.
I suppose many will take that as a brag. Kindred spirits will be inspired, and maybe, just maybe we will coalesce into a liberation movement, and join together to make escape cheaper and accessible for more and more people.
I sincerely hope many people WANT to live in cities.
Me: Hi boss can I work part time?
Boss: OK.
If he said "no" then life would go on.
and: Low on cash? Simply win the lottery.
Part-time work would be ideal, but there are few interesting part-time positions available...
Do we really need to cite the benefits of working less?
Also the fact that he literally doesn't address how he can afford to to this, which is the first thing on most peoples mind, also indicates that he is so wealthy he is out of touch with reality.
I understand he's advocating for less work. Why do you assume he's advocating for consuming less? He could be buying new Jordans for every run he goes on. His couch could be rhino leather for all we know. Personally, I doubt he's advocating for less consumption because he sits on boards of businesses who produce basic goods, like food, paper goods, and He also sits on a board for an event production and marketing company. It's hard for me to believe he's down with less consumption.
No, we don't. That's why the article is so empty; we can all imagine what it would be like if we could live without work.
Rich people don't deserve to be rich, this is a fact. No single human has enough IQ or strength to contribute enough gdp to the economy as to justify becoming super rich. The rich build their wealth off the work of other people. We all know this in a sense and that's why we feel it's unfair.
However, fairness isn't what drives an economy forward. Capitalism works very well, wealth inequality is just an unfortunate side effect.
How can someone deserving (or not deserving) something possibly be a fact? Who decides who deserves something and who doesn't? Or is there an objective measure of deserving something, so that it may be a fact?
Regardless of whether or not I agree with you, your argument makes no sense.
Maybe it's not strictly a objective fact because their is no quantitative measure, if this is how my statement is interpreted by most people then it is my mistake.
This does not mean that that the entire argument makes no sense. Many things in life cannot be objectively measured or strictly defined. We all as human beings have the intuition to judge whether or not someone "deserves" something or not even when I don't explicitly mention who does the judging. If I had said that "a murderer deserves to be punished, this is fact" would the argument still make "no sense"? No. It wouldn't.
Let me put it this way, unless you're a psychopath, I assume we all have the ability to judge who deserves and doesn't deserve something and that ALL our judgements will be remarkably similar if viewed from an unbiased perspective. That is why I can say such statements without explicitly stating objective measures.
If you're rich yourself I would say your judgement is remarkably biased and that you will take a more opposed or ambiguous view towards my statement about what rich people deserve. This occurs because people tend to almost always justify their own situation. This is a fact. Do I have an objective measure of this? No. Do I expect the average reader to be able to understand what I said despite lacking an objective measure? Yes.
No single man on earth has the strength or intelligence to create an economic contribution that justifies this sort of wealth. The super rich achieve their wealth off the backs others.
Here's a different point of view: Carlos Slim has so far been relatively unable to compete in the US. Some people argue that he does well in countries like Mexico because in those places, he can run a monopoly (like his telecom company) or oligopoly with price fixing power, generating large margin at the expense of his customers (who don't have much of a choice in the matter). Thus, his business has plenty of reserves for things like 3 day workweeks - at the expense of the population, in exactly the zero sum game you describe.
But when you look at modern American billionaires like Steve Jobs or Bill Gates, they made their fortune by working intensely hard and smart in very competitive markets, and inventing or making available to the mass-market products that created billions of dollars in value. It can definitely be argued that a single individual can create billions of dollars of new wealth, and not on the "back" of others - there's a lot of very wealthy early Microsoft and Apple employees out there, and billions of dollars of value created for its customers over the last couple decades.
A clearer example is Google: it has an effective monopoly on search, but it's not because it has lobbied Washington to stop people from using other search results, it's because it was the best search engine, spread like wildfire, and kept the market ever since. People use Google not because there's no other (legal) search provider available, but because it's still the best way to find things on the internet.
Because of this instinctive understanding of the value created, it's much rarer to see Brin and Page criticized for their wealth.
>But when you look at modern American billionaires like Steve Jobs or Bill Gates, they made their fortune by working intensely hard and smart in very competitive markets, and inventing or making available to the mass-market products that created billions of dollars in value. It can definitely be argued that a single individual can create billions of dollars of new wealth, and not on the "back" of others - there's a lot of very wealthy early Microsoft and Apple employees out there, and billions of dollars of value created for its customers over the last couple decades.
I disagree. Those innovative mass market products may be created under the leadership of one hard working man, but it is fundamentally impossible for a complex product like the iphone to be entirely the work of one man. The iphone, the boeing 747, and many other complex projects can only be built with the expertise and labor of multitudes of people. Steve Jobs and Bill Gates cannot build such wealth without exploiting the labor of their corporate empires.
I am rewarded (as you put it) for having say $100,000 in my bank. I saved it, maybe did some projects, etc. That money is mine, are you honestly going to say that I don't deserve the benefit that money brings me? Sure, it's only $5000/year in interest, but the argument doesn't break down if the amount has more zeroes in it.
Edit: Not only does a lot of the discussion revolving around rich people claim illegality, it is implicitly assumed. Tried and convicted in public opinion simply by virtue of having a lot of money.
Did he? Or did he simply "lead" the people who did the actual work?
"are you honestly going to say that I don't deserve the benefit that money brings me"
Are you honestly going to say that you deserve the benefits you get for simply having that money more than someone who's actually doing work?
Leading is a skill, and thus valuable, and so someone probably paid him to do the work of leading. Or are you going to just argue that "only making something of use is work". If that's the case, you obviously have a twisted world-view, and debating it is pointless with you.
>"Are you honestly going to say that you deserve the benefits you get for simply having that money more than someone who's actually doing work?"
Money represents the value I created to someone in exchange for it. So yeah.
I agree. Leading is a skill. But leading is not a skill that justifies an astronomical portion of the pie. I would say between coding and leading, coding is a far more specialized skill that is harder to learn and find. In short, it is far easier to tell people what to do then it is to do it. This statement grossly simplifies what leadership and coding is, but the basic premise still stands.
Also you should note that the skills needed to gain a leadership position versus actual leadership skills are not congruent. There are many people in leadership positions who are bad leaders yet get unfairly high compensation simply due to their perceived rank.
This illustrates another problem in our society. We have a hard time identifying leaders. Leadership is perceived to be a commodity skill but I would argue that many people can do it. How do you know the janitor or garbage man if given the right opportunity can't be a great leader for a fraction of the price of current average CEO salaries? We don't know. But if it were true, then that means leadership is not a commodity skill and therefore not justified to be associated the extravagant compensation that is often paid out to people who possess such said "skills."
No you don't. You may have earned the principal. But the growth was not earned by you. The growth is the direct result of employees within the company, if that's not you, then you don't deserve it.
This is true, but leadership skills are worthless if the people you're leading don't have the skills to do the work in the first place.
And again, you're going to claim that just having money means you deserver more of the reward than someone who actually put the work in to create something?
You're being obtuse intentionally. You have no intention of discussion, you just want to find a way to blame people getting benefit from money without some sort of labor (notably, your personal definition of labor). That is a twisted world-view, and one I have no intention of remedying in your head. Good day.
The argument does begin to break down once the amount has more zeros in it. If you had 1,000,000,000,000 in the bank I would say there's no way you got that on your own. You had to work with thousands of other people in order to get that kind of money. Therefore it becomes debatable whether or not you deserve that capital.
Probably, yeah. In my example, the number might not be a thousand, but more like 1-2. How is it different?
Point is, you'll have to explicitly state the difference between the two. At some point there is a disconnect. And that leap needs to be addressed otherwise people will simply go on implicitly claiming that rich people don't deserve what they have, or didn't acquire it legally, etc.
The wealthy who invest their money are, in fact, assuming some degree of risk that they can afford to absorb, while their investees have time and talent, but would be completely ruined by a failed financial bet of similar size.
By comparison, the investor who invests capital has no guarantee of compensation for his input; he eats the risk inherent in the venture, in exchange for a return on his investment if it succeeds. If it fails, he is out of his input and has not received any compensation for it. That is a level of risk that many people can't take.
Lenders, likewise, assume risk of default. It is not the act of having money which is rewarded - simply sitting on a large pile of cash doesn't magically spawn more money. When money is lent to other people, the lender assumes the risk for the loss of that money - the beneficiary of the loan may not pay that money back. Interest charged is payment for assumption of that risk.
We've not yet even touched on the fundamental aspect of the capital economy - mutually-beneficial exchange. Those employees that work for the startup that ends up making the investor a ton of money? They've gotten jobs and compensation that they wouldn't have otherwise. Nobody willingly and rationally enters into a transaction that doesn't provide benefit to them over the available alternatives; if it was not better than the alternative to take investment or a loan, then nobody would do it.
It grows compounding at 7% year-over-year because it's invested in companies and people that are growing their own businesses because of it. Money doesn't just grow on its own; capital accounts don't accumulate by virtue of their own gravitational pull. The degree of risk doesn't really change the fact that that capital is risked as investment hopefully helping other people succeed, rather than just sitting in a Scrooge McDuck swimming vault somewhere. You can still lose it, and it has to be somewhere that someone else is using it to produce wealth in order for your own accounts to grow.
This is my entire argument. Lets not consider risk for a moment... If someone else is producing wealth in order for your accounts to grow and you as the owner of the accounts are the beneficiary of this growth then that means you are exploiting someone else's work. This is NOT fair.
Now lets take a look at the equation with your statement involving risk.
>"Low risk" is not "no risk". I mean, heck, look at 2008. People invested in index funds - frequently considered one of the lowest-risk, most stable stock vehicles - lost 50%+ of their invested value in a hurry.
Low risk is not no risk but does low risk justify extravagant returns? No.
If I have 20 million dollars in a stable fund that grows 10% a year, that means I get 2 million a year sitting on my ass. The majority of people in the US will not never even touch 2 million in their lifetime. You want to justify that kind of compensation by saying that index funds still involve certain risk?
Let's be real, bubbles pop and industries heal, the economy goes up in aggregate, and many rich people stay rich or get richer in extreme and extravagant ways that are grossly un-proportional to the amount of work they output.
You are the partial beneficiary; the person who has used your money has also benefited from it. They have accomplished business goals and produced goods and services that they could not have without capital, and the price of that capital (a percentage return on the funding raised) is worth access to that capital without access to its associated risk. This is a fundamental tenet of capitalism - exchanges and transactions are only entered into when they are mutually beneficial. Somehow, the whole is greater than the sum of its parts!
> If I have 20 million dollars in a stable fund that grows 10% a year, that means I get 2 million a year sitting on my ass. The majority of people in the US will not never even touch 2 million in their lifetime. You want to justify that kind of compensation by saying that index funds still involve certain risk?
If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic.
> bubbles pop and industries heal, the economy goes up in aggregate, and many rich people stay rich or get richer in extreme and extravagant ways that are grossly un-proportional to the amount of work they output.
Bubbles pop (with investors in risky ventures/funds eating the brunt of that), industries heal (certainly not overnight, and during those recoveries, it is again the capital-holders who bear the financial burden), the economy does go up in aggregate (because it's not zero-sum, which is why laborers benefit even if the rich get richer), but are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it.
I'm not talking about venture capitalists risking and betting money on speculative private businesses. I'm talking about what a typical rich person does to preserve and grow wealth. They put it in stable index funds and live off the interest for the rest of their lives while contributing almost nothing to economy.
There is no beneficiary in the stock market. The money goes to another trader while the stock price reflects either speculation or corporate output. But that's besides the point, in a low risk index fund, a 20 million investment yields 2 million with no work while your average worker gets 50k annually for working 5 days a week. There is no fairness in this no matter how you justify it.
>If you have 20 million in a stable fund, that's 20 million dollars of capital that is being used to promote other businesses and to produce goods and capital that otherwise may not be produced, and it's 20 million dollars when you can lose overnight. Again, the value contributed is not the labor, but capital and assumption of risk has a very real impact and is an absolutely necessary part of the equation. The capital holder is enriching both himself and the person in whom he is invested. The capital holder is happy because his risk yields dividends, and the capital consumer is happy because his labor yields dividends, and you're right, the capitalist didn't put in the labor, but the laborer didn't have to put in the capital. Neither could do it nearly as effectively without the other. The relationship is symbiotic, not parasitic.
Your view of risk is very incorrect. No stable index fund goes to zero overnight. Worst case scenario you lose 90% of 20 mill overnight and you're still 2 million dollars rich. Even then in every case, your investment fund will eventually go back to and past 20 million over time. This has always been the case, historically, for the American Economy.
Ever hear of a 401k? Even though those are essentially stock funds, people put money in them for safety, not risk, these are the same funds rich people throw their money into.
Also your symbiotic view of laborer and capitalist is flawed. The laborer creates a 2 million dollar product and only sees a 100k annual salary, while the capitalist put in an investment of 100k annually and reaps the benefit of the 2 million dollars. If the laborer's labor is worth 100k then we're talking about different returns by a magnitude of well over 100% for equal investments. That's not symbiotic, it's parasitic because the returns are not not distributed fairly. Rich people justify this with "risk" but the risk is minimal; remember I'm not talking about the startup game, I'm talking about rich people and their low risk strategy to grow their money.
>"are you suggesting that earnings should be directly proportional to the labor invested? I'm not aware of any economists who place any stock in the labor theory of value. The empirical evidence directly contradicts it."
You're telling me it's ludicrous to get paid fairly for labor contributed and that empirical evidence supports this? How about this? The laborer creates a 2 million dollar product, the laborer gets 1 million, and the capitalist gets the other million? That's way more fair than what we see in the real world. If there's an economist who thinks this is unfair I have to disagree with him/her.
Have you heard of the term wealth inequality? ...
That's a mistake on my part. My comment was directed more towards people like the author of the OP who are rich and do no work. That being said rich people cannot contribute anything more to the economy other than what they can produce with their own physical and mental labor. This is a fundamental limit, that is set by the laws of the physical world. Yet, paradoxically, the wealth of the super rich skyrockets past this limit.
This is because the capital they deploy into the world isn't generated by them. It's generated by the labor of the corporations they own. A corporation is composed of employees and this is the true origin of capital. The money rich people deploy and churn into the economy is capital "owned" by rich people the same way landlords "own", "redeploy" and charge rent on land; If you disagree, note that in the english language land and corporations are both referred to as capital.
Face it, they're freeloading at this point.
Societies closer to communism tend to generate a large amount of kafkaesque government workers, whose goal is to complicate any process they control in order to ensure maximum benefits at minimal contribution to society.
Societies closer to socialism with healthy social nets and welfare systems tend to attract a large influx of constituents, whose plan is to game the system for maximum payout from the government, and countries with liberal immigration policies like Germany or France already have massive public issues with it to the point of political pendulum swinging to ultra-right parties.
It seems like any society has to make a rational choice about which freeloaders it's okay with, and at least try to align the incentives right. In the US we're okay with rich not working, but we gouge them via property tax, sales tax, taxes on investment income and estate taxes. It's not like having Paris Hilton working a full-time job would energize the US economy.
Doesn't matter how much a rich person works. Their "work" is in no way equivalent in value to their extravagant wealth. That being said, I see no better alternative to capitalism. Wealth inequality is an unfortunate side effect that is just a fact of life: it's unfair. What I don't like is when people try to justify their wealth as if they deserved it.
So... why doesn't Carlos Slim, as chairman of several large companies, restructure them to be 3 day work-week environments? Surely as someone who is about the richest man on the planet would be able to have some influence in the companies he owns/manages?
"To a certain degree, Slim has been applying this train of thought to his own businesses. According to the Financial Times, Slim's phone company Telmex has implemented a system where workers on a collective labor contract who joined the company in their late teens can retire before they reach 50, and can continue to work for full pay four days per week."
While he could probably be doing more, he is working on it.
This sounds like a pretty mutually beneficial arrangement to me.
If I had some narcissistic level of tunnel vision I'd say I'm like this because I'm a good person - see how amazing I am? In reality, I'm only like this because others are suffering for me and the lack of suffering allows me to act a certain way. Slim doesn't seem to realize this, or like most public figures, makes public statements for his own political ends not out of belief (remaining likeable, etc). This was recently addressed by this great Atlantic article, "Why It Pays to be a Jerk"
http://www.theatlantic.com/magazine/archive/2015/06/why-it-p...
Personally, I'm a little surprised we havent moved to a 6 hour work day. I feel between 3-5 no one is productive and leaving at 3 ties in nicely when school ends and gets you a couple hours of much needed sunlight and freetime/chores time/family time/exercise time. Funny how pro-family politicians never fight for more hours to spend with your family. I told myself long ago that if any of my little side-projects takes off, I'd make a real effort to implement the 6 hour workday. So far, no luck, but I feel its feasible. Most places I've worked at have a unwritten rule of no meetings and no "real" work after 3:30 or so. 9-1 seems to be when everything gets done.
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
1) We all have a fixed number of hours per day. 2) If we don't have enough money to pay for housing near the centre of a city, we lose a significant chunk of those hours commuting for work, shopping, cultural, entertainement purposes. 3) So we try to move as close to the centre of cities as possible, but 4) land in the city centre is constrained, so we are now in competition with everyone else to pay for central housing 5) So we try to earn more by working more, up until the extra hours worked are more than the hours commuting saved.
It turns out that at the moment, thanks to various regulations / societal norms in the western world, this changeover point occurs at about 5 days work a week (for higher-paying professions, you can get this down to 4, for lower paying it may increase up to 6, or even 7)
This pattern will occur until we can remove scarcity of all resources - whilst scarcity exists, we will always be in competition with our neighbours for those scarce resources, and we will have pressure to work more to obtain them.
Thankyou for reading this economic theory from someone who knows next to nothing about economics...
The Bill Watterson quote drives me up a wall. I can't imagine doing nothing.
I live in Washington DC with my wife. I make slightly more than she does (though with taxes and her benefits it probably comes out even), and she made enough before meeting me to buy her own condo here in one of the most expensive areas of the country. I charge only about half of what other consultants with my experience and skill set charge. Neither of us makes six figures. Just shy, but not quite. Combined, our AGI was just under 200k.
By almost all accounts, we're "rich". We went on three international trips last year. We went on three other mini-vacations that were only possible because I can work from anywhere. I'm working two 40 hour weeks here this week and next, just so I can have a big chunk of extra cash that I can play with--I think of it as reverse-vacation, I get to choose to work more for spells of time. I'm buying a gaming laptop with it, and some parts for my desktop. I could afford it without the "overtime", but this way I don't even have to think about the budget. We also put in quite a bit of money to our retirement funds, and have excellent health insurance.
How is this possible? I know couples making $500k between the two of them that don't get to go to all the amazing places we go to, because they're constantly worrying about money. It's because, for the rest of the year, we live in our means. Three international trips was in our means. Computers and electronic toys whenever we want them are in our means. If they weren't, we wouldn't have done them. We pay ourselves first (retirement funds). We don't have a house larger than we need. We don't have multiple cars (I don't need a car, so we have only one. Our great credit has meant that it's nearly paid off after two years, at an APR that has been less than inflation). We aren't fashionistas, so we don't drop money on clothing all the time.
Long story short, we just don't go into debt. The only real debt we have is the mortgage on the condo. We work her travel mileage card, so most of our flights are "free", in a sense. We just don't overspend on recurring expenses.
A $350/mo car payment doesn't sound like that much more than a $300/mo car payment, but it adds up! That's $600 in one year that you could have spent on a graphics card, or on a longish flight, or on a nicer hotel, or on a rental car instead of buses.
A $2800/mo apartment rental doesn't sound like that much more than a $2500/mo apartment, but it's $3600 a year! That's a brand new, uber powerful gaming computer every year. And you don't even need to buy it every year.
The recurring expenses in your life are a lot more expensive than you think they are. They are a hell of a lot more expensive than most of the expensive, one-time purchases you'll want to have in your life. Who needs a large house? Who needs 4 cars in a household of 2 drivers? Who needs a gigantic minivan or SUV for one kid? My parents drove my sister and me around in a coupe for most of our lives, making us squeeze past the front passenger seat to get in the back.
Even if you're living alone, you could get a roommate, or an efficiency apartment. You don't need a lot of stuff. I'd like to get rid of some of my stuff, and I don't actually have a lot. What do you use on a daily or weekly basis? I submit that there is nothing you'd use on a monthly or yearly basis that you can't rent more cheaply than own.
Don't chase af...
Don't have debt (or make it a priority to repay), and reduce consumption.
You might be surprised see how much less you really need to live comfortably.
If you want to have a fun lifestyle, you have to cut your living expenses. Housing is pretty much everyone's biggest expense, which is silly because houses aren't "fun". I don't know anyone who has parties often enough to justify large living spaces. I do really like hosting parties, but I can do that in a park or a private room in a restaurant more easily than at home, and it's a hell of a lot cheaper than keeping a large dining room and living room all the time.
I also think of it as being brutally honest and pragmatic with yourself. You have to decide for yourself how you will live your life and not let other people's expectations decide for you. Want to be a literal rockstar? You can do it if you give up on the same sort of vacations your coworkers are taking. Don't want to give up on vacations? Admit to yourself you like vacations more than being a rockstar and give up on spending money on being a rockstar.
I think a lot of people distract themselves with spending money on things that they think they are supposed to want, but ultimately aren't actually what they want. For example, despite what they might say out loud, a lot of people really just want to sit at home and watch TV. That's absolutely fine. Just admit it to yourself and stop spending money on fishing equipment that you never use. Then you'd be able to sink the money into a massive home theater system instead, something you'd actually get to enjoy on a regular basis.
If you try to do both, you'll end up in over your head in debt and not getting to fish or have a big home theater.
We have friends who are trying to "do both" on travel and a large house. We have been to their place for parties twice in the last year. They've been to our place for parties twice as well. We didn't have quite as many people, but I think that also made for a better party. They don't make any more than we do, they are constantly in debt, it's ruining their marriage, and now she just got pregnant so their income is about to get cut in half. He just took a job he hates because they will need the money.
If my wife gets pregnant, our options will be to... stop booking international flights. And that's what we're planning on. We're actively planning on shifting how we enjoy ourselves to accommodate our means. Luckily, we both really like board games. I've personally put off playing games over the last few years so I could focus on travel, get the most out of it, then switch to gaming together when we settle down.
Whatever it is you do, do it completely. Don't half-ass two things, whole-ass one thing :)
A couple of days ago the current President of my country was asked what should one do if he had a hard time finding a job, finally got rather low paying job, but he'd still like to start a family. He answered without a shred of hesitation that such people should borrow money from somewhere, effectively becoming indebted to some bank for the rest of their lives.
It's a very common mindset, people are being trained to believe that living with a huge debt is a perfectly normal thing. It isn't. Just as you say all you need to do is to live within your means and rationalize your spendings a bit. It's surprising how many things can be "within your means", even with very little income, if you're willing to do some work on your own.
I was way poorer than I'm now for most of my life, but I was never indebted to anyone. Instead of borrowing money I've learned to live making around $200 a month. That's of course another country, another currency and another economy, but to put things in perspective: that's less than one tenth of average income here. I learned to fix things that broke, learned to make things of my own, learned to recognize when something is worth its price and when it's not. I'm almost 30 now; I earn twice the average salary now, but I still make (some) furniture of my own, I still repair things around the house myself and I still don't buy the most expensive things "just because".
I don't know about economy and such, maybe it really is beneficial for most people in the economy to borrow money and live way above their current means, but on a personal level taking on a debt looks like an economic suicide.
If your view of a healthy economy is one that siphons money out of the working class and into the coffers of large corporations in an ever growing spiral of consumption, then yes, taking on debt "makes sense". If the amount of money being spent and the market capitalization of your largest firms are the only way a country knows how to measure its wealth, then it will clearly prioritize spending over all else.
Personally, I think a healthy economy is one that meets the needs of its citizens. Why should 150 million people be "stimulated" and "incentivized" to spend money they don't have to make sure they all have new iPhones so Apple gets richer? Wouldn't it be better for those people to save their money and spend it on things that are actually important to them? Half those people spending half that money in their home towns probably goes a lot further.
I was poor too, when I was a kid and entering my career. I fix stuff around my house, too. Why am I going to spend $1000 on a new TV when it's a $2 capacitor that is the problem? Maybe that's what it is. We don't trust a system that wasn't there for us. The modern era of data-fueled, giganto-corp protectionist capitalism is all about making sure the richest get their due before the rest of us.
Don't get me wrong, I believe in capitalism. It's how small businesses work. I'd much rather give my money to a local shop ran by people in my own community, people I know, friends even. I know I'm helping them out, they know they're helping me out. That's healthy.
Yes, taking on debt is a risk, but it is far from the worst financial risk you can face, because it is predictable and often tax-advantaged. If taken on for the right reasons, it can provide leverage to achieve returns that would otherwise be unavailable.
For example, using mortgage to purchase property when you are young provides more time for compound appreciation of your property. And at least in the U.S., people who earn college degrees when they are young have average lifetime earnings improvements well in excess of the typical student loan costs.
Most people don't take it for the right reasons. They take it because they've been told to. And they aren't doing anything towards enhancing their understanding of debt.
For example, lots of people will go into debt to go on international trips. We structure our travel on our credit card and pay it off right away because it pays us to fly again! But most people don't have that system in place, they run up the credit card debt and then take 6 months to pay it off. I just plain hate the idea of paying for something today that I used up yesterday.
And I don't think the emotional impact can be overlooked. Even if you can make an argument to me that it would be "smart" to carry a transient purchase as debt (and I know you're not going to try to, I'm just making a hypothetical), I'd still feel bad about it, and that bad feeling is going to have a real impact on my quality of life.
Before I was finally out of debt, I paid off my student loans before I paid off my car (when I had a car) because even though the APR was higher on the car, I could pay off the student loans sooner. It's a snowballing effect. It felt like an accomplishment and it helped me maintain my frugality.
Telling someone with $30k in credit card debt (I know several people like this, it's not that uncommon these days) that they shouldn't run a balance on their credit cards isn't helping them. You've not told them anything they don't already know.
But maybe they don't already know that they don't have to have a big house. That's the intention of my story, to try to jolt people out of their half-waking state. People aren't perfectly rational beings and it's probably stupid to expect them to be so. But there are simple rules of thumb that I think people can take to heart that will improve their overall outcome much better than telling them "you need to consider and be careful with the debt". People work much better with all-or-nothing measures, rather than measures that rely on subtlety and restraint.
It's probably why no-carb diets work out better than calorie counting. It's not because carbs are particularly unhealthy, it's that people can't constrain themselves to the small portions necessary to count calories while eating complex carbohydrates. I know I can't. So what makes more sense? To repeatedly fail at exercising restraint? Or to succeed at a slightly less efficient plan?
Even taking on a mortgage is most of the time a bad call for most people. They live in the house for 5 to 10 years, then move before they get even close to realizing the potential of the property. Then, instead of getting a similar-sized place, they get something larger, something that fits inside their paycheck. Even if they sold their previous house for a net profit, they just roll that over into the new house. The net effect is that they are constantly renting from the bank.
That only makes sense if the mortgage costs less than rent for a similar place. If it doesn't, it's smarter to rent a place and sink the difference into a fund for buying a place when it does make sense to buy. But most people aren't going to keep track of their finances like that.
For example, the idea that "taking on a mortgage is most of the time a bad call for most people" is just not supported by the data. About 65% of the homes in the U.S. are owned, and most of those are households that are financially stable. Even in the depths of the financial crisis, well under 10% of homes entered foreclosure each year (i.e. 90+% were stable). And there are national correlations between homeownership and positive things like income, academic achievement, lower crime, etc.
Terrible for individuals though, brings untold misery.
I see many bad comments in this topic but I believe you described an honest example of what it means to make good sacrifice and live a good life.
I am on the lookout for a new job, was searching for a remote one, and in italy it isn't as easy as outside (at least for now). If I can't find anything suitable I'll seriously consider the part time option, and I wonder why it hasn't been taken into consideration up until now.
We are not our work, we are what we are indipendently of our work. Work is a tool, sometimes to freedom, yes, but mostly to be part of this world, to allow us to experience the world, because that's what the money partly does.
I agree with you and with the article, we shouldn't work that much, and if we all worked less, it's also probable that even more people would have a job since we all work less.
Improving life and human interaction, living with the people we love, that's what really matters.
I don't know, I don't think it's necessarily wrong to "be your work." I'm sure a surgeon of a certain congenial disposition can be his work and it is a healthy thing. I'd hope teachers were wanting to "be" their work, though I also understand that they often don't get paid enough to do so.
I also don't want to tell anyone their particular lifestyle choices are "wrong". If you want to be a recluse and, IDK, collect stamps the rest of your life, if that is what you really get enjoyment from, more power to you. Just as long as you personally know what that is and that you're not going to become mayor of your home town because of it.
But you are right, by default one shouldn't "be" their work. It's a privilege to have a job that you love. Most of us don't have that privilege. We have to make our own way, and there's only a limited amount of time to do it. Don't get distracted with things that ultimately aren't that important to you.
Weigh the options, make an informed decision. People need to stop deluding themselves into thinking they can do everything. We can certainly do anything, just not all of it. You have to choose.
Everything could be summed up with "use good judgement" in these cases, but yes, in the end we have to choose.
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
Believe it or not, negativity can be justified. And although wealth is a controversial topic I believe that an innate feeling of unfairness that most people feel towards the super rich exists because it actually is unfair. This feeling of discontent has toppled empires and changed entire economic systems. It is worth it to explore this negativity rather than suppress it.
>I'd rather figure out what this guy did right and take steps to implement some of those things into my life.
It is not physically possible for everyone to live this way. No single man has the intelligence or strength to contribute enough GDP to the economy to justify such wealth. If you want to live like him you must exploit the labor of others. In short to be rich sometimes you must do things that will promote feelings of negativity in other people.
My guess: earn in dollars (or dollar equivalent) and spend in rupees. I.e., first world salary and third world expenses. Works like a charm in India.
If you're a software developer in the first-world, you're making, what, $75k/year or more? If you spend wisely, you can live quite comfortably on $30k/year, at least before housing costs.
Personally, my plan is to work full-time for the next ~10 years, putting every dime above the $30k/year mark into my mortgage and my retirement fund, and cut back to part time after that---I'll own my house, and with a couple decades of compound interest, my retirement fund will be set, too.
Most people in our position won't do this, though---they choose a higher standard of living (a new car every three years, a house at the very highest end of what they can afford, etc.) over working less. If that's what you want to do, that's fine---but don't pretend it would be impossible for you to cut back.
That's what I get from the article: the author's suggesting you do whatever it takes (including living on less money) to work less.
Living off of $30k/year here in Oregon is a fucking pipedream for a family of 4.
I feel like most of the statements about how much someone can live off of, should be preceded by whether they're single and what part of the world they're living in..
See grecy's comment about want vs. need.
> If you're a software developer in the first-world, you're making, what, $75k/year or more? If you spend wisely, you can live quite comfortably on $30k/year, at least before housing costs.
You've hit me on the head. That's very much what I make, and I actually live on less than $30k/year.
It's not even hard. No smart phone, no cable TV, cook my own meals, old car, ride bike to work, enjoy simple things like walking and frisbee (free). I've saved enough in 4 years I'm on the cusp of taking 4-5 years off to go adventuring.
> If that's what you want to do, that's fine---but don't pretend it would be impossible for you to cut back.
I feel this resistance from people all the time. They will very quickly tell you they need their iPhone, cable TV, latte and new clothes weekly.
Our society has it's wants and needs mixed up. Once you fix that, it's easy.
In particular, my wife works a "normal" 45+ hour work week at a job she loves. Every evening is filled with stories of her day, and she exudes happiness when she tells them. She also gets to challenge herself with real-world problem solving. She's always moving and thinking.
Now, do our jobs take us away from our other passions? Of course! We'd both rather be climbing mountains that sitting indoors. But, there are comforts of life that we've chosen to give ourselves. Those comforts come at a cost, either in time, location or money.
I'd argue that it's better to find what makes you happy and determine what the cost of that happiness is.
That's right. You can do this.
I think my bill rate is pretty realistic for a developer, and I can more than sustain my family working four 8-hour days (so I do). You only need to make 25% more than the average joe to pull that off. And seriously, if you're a developer and you're not making >100% more than the average joe, you really need to go have a talk with your employer about the current state of the market. So yeah, all of us make enough to do this.
No need to scrimp. No need to be the CEO. The math just plain works out.
Incidentally, the author is right. Even taking one extra day off per week has had a huge effect on my quality of life and overall health. I get outside a lot more, play with the kids a lot more, don't seem to get sick at all anymore, and come in to each week completely fresh and actually missing work a bit. It's cool.
I still kick around the idea of dropping down from my current 4 day weeks to 3 or even 2 day weeks.
The problem is that money is currently the universal standard for measuring success. There are many more dimensions to success and in fact, everyone should build their own model of what constitutes success, including things like spending time with your family, reading a good books and so on.
I am truly jealous of the people that have enough just to get by, spending most of their time outdoors, traveling and getting to know new people and cultures.