Why do people hoard money like they're braindead
Note: I've been meaning to post this and it isn't related to the other post where some one asked "Whats the point of saving money".
I know a lot of people in finance who scrounge, save and basically make themselves suffer all for the sake of saving money. I also see people on other sites like reddit saying they know millionaires who don't change their clothes, don't live in a nice house, don't drive a nice car but works really hard. I just feel like these people are wasting their lives. I am not saying to go out and max out credit cards but fucking life is for living. I posted once about a partner I knew at the Big 4 where I used to work died suddenly and he was like that, no hobbies whatsoever, rarely went home early because I am sure he hated his family, behind his back people would compliment him saying things like "don't let his demeanor fool you, he made X million last year" or some other retarded praise, he was a titan in the industry, but when he died of a stroke or heart attack, they didn't even name a meeting room after him. He is just gone, went straight to work from HYP, made money and died. Didn't even go to a concert or left the continental USA.
I recently spoke to an investment banker who said all through his analyst and associate years he lived in a 5 bedroom with one bathroom to save money, I can't imagine smelling the shit and piss of 4 other strangers when I am making $250k+ a year. He still lives in a basic 1 BR in Manhattan and has no plans to have kids according to him and people applaud him for how frugal he is.
He is approaching his 40s now and he admits its a struggle but he wants to have a nice nest egg when he retires around his 60s for leisure and travelling. I am not ageist, but by then whats the fucking point, your friends would be in the twilight of their lives, some would have died or formed significant bonds without you and you'll be forced to buy time with an escort or someone who is only interested in your money, these types then start complaining that "money doesn't buy happiness". When it was their braindead way of acquiring money that made them miserable
https://sampriestley.com/millionaire-tramp/ <------ Posts like that piss me off too because to me that person wasted their life. It's almost like they're NPC's and were only programed to make money.
Sorry for the rant and if it seemed harsh but I feel like these people could have lived way better lives, starting companies, helping the poor and struggling artists around the city which would have led to a more colorful life.
Instead they lived and died as "millionaire tramps".
Why do you guys think people live like this?
I think at the end of the day, we all just have difference experiences and perspectives. For me, I never took advantage of the fun in college until the last year and was only focused on working, saving, and getting good grades. I realized it's all a sham, I plan on blowing it all throughout my 20s and enjoying every second. It makes zero sense to save aggressively, invest, and satisfy some corporate drone boss while my prime years slip away because I know for a fact I will look back and hate myself for it.
Other people will say use your 20s while you're fresh and grind super hard so you can coast your 30s and 40s, that ain't me but some people are just more comfortable with that path idk. I think part of it is a coping mechanism, there is most certainty a correlation with people obsessed with status/money/career and their lack of general social well-being/life in general so they resort to just hoarding money and climbing the corporate ladder to compensate, especially in finance. I've seen it time and time again in my classes and even on this forum.
That makes sense, judging from your title you are still an analyst 1 such as myself. Saving money now makes sense as we don't have hundreds of thousands to fall back on. Plus sacrificing in college is the reasonable thing to do.
I am speaking more towards people who have millions in liquid cash and still living like us and in many cases have worse standards of living. What I am saying is, at that point I do not understand the grind especially when even they admit it's a miserable way of living.
There is some wisdom here buddy. Those who are at the top of very demanding careers are usually pretty unfilled. While that sounds like colossal cope it really isnt.
You need time to focus on your own health, interests, identity as a person, etc. It sounds cliche but traveling international when you are young and still free is worth it every time. You only have a 10 year window or so (it's smaller than you think) where you can backpack around parts of the globe, stay at hostels, meet other travelers, etc. and when you get older things like that will be some of your best memories.
Prioritize personal health as well. People are willing to give their employers 10+ hours a day but not 1-2 hours themselves , it's sad. Work out daily to some degree if possible. Lift weights, have good cardio, find hobbies/interests that challenge you and aren't based on alcohol.
Money enables these things yes but you dont need to be stupid rich to afford a great lifestyle
Yea traveling is nice but realistically I feel like it's only doable when you're in college and have loaded parents, there's also something special about the ages of 18-22 and doing all that past that probably just isn't the same. But yeah I agree.
Cause or effect? The people at the top of those careers tend to be that way because their personality is such that they are never satisfied and fulfilled. It's that feeling which keeps them ruthlessly chasing the carrot.
Bc I’m going to buy a house and they’re not cheap
If your anecdotes were even remotely representative of the US population, this would be valid, but the vast, vast, VAST majority of Americans way over extend their lifestyle. Sites like this just give an incredibly skewed view of how the average person views money because we work in finance, so you'd expect people on this site to be more like Scrooge.
If anything, praising savings in the US doesn't happen enough. Sure, there needs to be a balance between savings and consumption, but in aggregate, the US has a consuming too much problem, not a saving too much problem.
The average american, even a white collar professional in fields such as marketing, law, accounting, engineering, etc. is absolutely clueless when it comes to investing as well.
In fact someone on a modest salary can easily lap doctors, lawyers, etc. by just knowing how an index fund works
Yeah you are right. Posts about being frugal gain a lot of traction because its objectively the right thing to do, same way how twitter is full of leftist posts because its objectively the most moral view to have. That doesn't mean most people actually want to do or believe that.
The best approach is one of moderation. Saving is important, but not to the point of being an ascetic hermit. I’m a strong proponent of living beneath your means, honestly if you’re a director making $600k living like a VP isn’t a huge sacrifice.
I’m also a strong proponent of optimizing your spending. If you could care less about food, don’t blow money on a three Michelin star restaurant. If travel is your passion spend more on it, but don’t just adjust all of your tastes and spending upwards.
Very good advice. I'm a bit older and have lived this way my whole adult life. I've done well and I'm more than happy to spend lots of money on things I enjoy (good meals, trips, quality home and furnishings, etc.) However, for things that I don't care about (cars, watches, high end clothing, etc.) I just don't purchase. When I was much younger, probably the age of most posters, I wanted a certain car and watch but couldn't afford it. It was a goal. But once I could comfortably afford it, I no longer wanted it. Just wasn't important to me.
Figure out what's important to you and reward yourself in those areas. Firmly believe you need to celebrate your successes in your own way in order to give you enough juice to keep at it. However, focus on your way, no one else's. Don't try to keep up with the Jones'. I've found living a bit below our means day to day, yet enjoying the heck out of things when we want, has left us in a very strong financial position for the rest of our lives. Have friends that are far more lavish and have the 2nd and 3rd homes. I just don't really care about that. When we all go out to dinner, we're all drinking the same wine.
The personal finance community consists of people who make 30k and people who make 300k. The ugly truth is that the easiest way to save more is to earn more, and mentioning jobs or salary is taboo in our society. So instead they talk about ways to be super duper cheap and put away every penny.
I know someone who is very far left politically, disdains capitalism, etc. etc. but he's a social worker and is now trying to move away from agency work and bolster his private practice because he'll make more money. The profit motive comes for us all!
A wise man once told me: earn more, don't spend less
Fear
I already commented something similar in the other thread, but it's relevent here also. I do not see the point of growing my net worth until I pass away leaving a large inheritance / property, instead I want my wealth to follow a normal (or perhaps lognormal) distribution curve.
By this I mean that I want my net worth to peak in my late 30’s. Then, I intend to quit stressful work to pursue something I genuinely enjoy that doesn’t pay well (or at all). At this point I will slowly start spending more than I am putting aside each month, gradually eating into my investment portfolio, and eventually even selling properties until there is nothing less by the time I pass away.
For me personally, this justifies putting aside a little extra in my 20’s to allow for an early “peak” in my net worth. And the way I go about this is by spending what I need to enjoy life without going over the top. I only compromise on things that don't contribute to my happiness and quality of life. For example, I enjoy partying on the weekend, but I always try to drink heavy in pre-drinks and spend very minimal in the club, I have never purchased champagne or paid for table service because this adds no enjoyment to my night.
IMO anyone with a modest white collar career can/should be able to get to 1M+ net by 40-45 (more based on careers here). From there can easily move work from grinding in soul sucking job to something a bit more fulfilling.
I’m in the position you describe, but it’s hard to walk away from a job that pays $600,000, benefits, and yeah, prestige.
read die with zero by bill perkins, it distills this so well. while I have issues with some of his assumptions, the principles are rock solid.
the short answer to your question? because they're not living with intentionality
Hmm just googled it and seems like and interesting concept.
This post is kinda inspired by my mum, she died earlier this year from a short illness and some of her last words were that she wanted to start living right when she got out of the hospital. She was very frugal when she was alive, to the point of making us uncomfortable even though we had the money for a very comfortable life there was a lot of artificial hardship for no reason.
Wish I could have given her that book earlier. I still kinda feel a sense of anger and pity towards her when I remember those words. I still wonder why she made us all live like hermits for long periods only to regret it in the end.
first, I am sorry for your loss, I am confident you will live a life your mother will be proud of, wherever she may be. make it your life's mission to live up to that, I do not think she would want you to live with regret.
this is a tough mindset to break out of and some people never can. I see it with children of depression era parents whose biological wiring is such that the fear of it being taken away outweighs the potential enjoyment from spending money, maybe they grew up in a country like brazil or argentina where they needed a lot because of risks of hyperinflation, maybe they've lived through the holocaust and quite literally saw everything they had get taken away, I can't say for sure.
I also know this from my own clientele - most people have no clue what to do with themselves. we get stuck into routines and find purpose externally like through a job or a board position or a business we own, and maintain our purpose by staying in those routines, so when someone challenges you like me or bill perkins and says HEY! SPEND YOUR MONEY! people have no idea how to do it. maybe because they've neglected hobbies over the years, maybe their hobbies aren't expensive and they've simply gotten to a level of wealth that's wildly unnecessary for their lifestyle (e.g. if all you like to do is hike through public parks and read books, you don't need $10mm), or maybe instead of viewing money as a means to an end, they view it as their value (they view net worth as self worth).
finally, stop saying you wish this or you wish that. it's natural but it will only lead you to a bad place. instead, live with intentionality. like I said in the other thread, once you've hit your savings goals, start checking shit off your to-do list, whatever that may be.
I've seen this show. I never understand the people or the mindset. At one point, its good to not be entangled by material possessions, but to what extreme? For example, in this, would it kill my guy to buy a couch or bed? I understand buying a honda vs a lambo, but walking everywhere hurts you in other ways.
I think you are letting your beliefs and views color how you view other people. Just because you think living life = spending money, traveling and buy things, doesn’t mean others do.
There is a balance in life. For every decent, moral person there is an evil person. For every altruistic human, there is someone totally selfish. For every person like you who thinks spending cash and traveling, etc is living life, there is someone who likes routine, saving cash and finds comfort in staying in the same place.
I get zero happiness from material things, literally zero, but I get immense satisfaction watching my bank account grow. Others in my family are the total opposite. So I actually understand people who are rich but don’t spend.
Now of course I don’t take it to such an extreme. I live in a nice house and travel and stuff because I don’t want my family to live a boring life, but I totally understand the hermit mindset.
You need to understand that for every view point in the world, there is a counter point. Someone people find solace in knowing they have a huge nest egg combined with the fact they get zero happiness from spending.
Totally agree…some of my friends do this and it’s pathetic, especially the ones who have saved 7 figures early in life. Some of them look at a dinner bill like they were just given a diagnosis of the crabs.
Bruh these are the types that piss me off. They refuse to pay for uber and bring out a calculator to split a meal that costs $103 between 3 people. Meanwhile they have millions in the bank, all for the sake of frugality. At that point I usually just think they get money because thats what society says you should have, they don't have any mind of their own and I'll be surprised if theres any complex thoughts in their minds.
I’ve entirely cut these people off…just recently got rid of the last one. Can’t have them around stressed out the whole time, it’s palpable and overall just silly. No one I hang around with now really cares - we take care of splitting things without much urgency and with zero strife or lines of questioning.
Tbf, I would also cut off people who can't do simple mental maths
I follow a lot of golf, so think about it like the PGA tour (pro golf). Tournaments are every week, in a different city/state/country. You have to fly their on your own dime, find a place to stay, eat, practice, do all the stuff physically for your body. (Not just as simple as going to the country club around the corner and drinking some beers while you play). There are some guys who basically have a $ amount then they're out. Then you have a guy like Tiger Woods, who basically made a billion playing golf, but still did it, even with more eyeballs and scrutiny on him. Point is, most guys on tour, if you gave them ~$20M, you'd never see them again, but Tiger (he's hurt now but if he could play), would play you as hard for $5 as he would on the back nine at the Master. Guy just loves golf and competition.
Point is, for some people, they went through their whole life just focusing on school and grades, then getting into a top college, then a top job. Don't really care about anything else, don't even really care about the money, just love to work. Its the only thing they have.
Other people aren't motivated by possessions. In fact, they get less motivated by possessions as they are able to get them. Somewhat law of diminishing returns.
Still others, are basically the opposite of the "spend everything crowd", they hoard all their money. A lot goes into it. Its easier to look at someone else's lifestyle and think why don't they do this, or do that. But that's how they want to live.
And then on the other end of the spectrum theres this kind of thinking, where 500k is not enough money for a family because at a minimum you need BMWs, 20k of vacations, etc: https://www.financialsamurai.com/scraping-by-on-500000-a-year-high-inco…
Whats the point of saving money? 40k in your 401k/IRA at 25 will make you a millionaire at 65. you don't need to go crazy, just maxing out your 401k consistently will get you to a very comfortable place if you dont mind waiting till age 60+ to retire
Although personally I feel that on the types of salaries people make here its not a huge hardship to live on like 50% of your salary and try to retire early in your late 30s/early 40s
Booooo. Financial samurai is great. He wasn't saying 500k isn't a lot, he was saying that it establishes a nice lifestyle in a HCOL city but it doesn't provide luxuries certain people might think it does, like being able to quit after a couple of years and do nothing, fly private, or a super lux retirement in a HCOL city
There is a bell curve to everything, what you are describing are the handful of outliers, those living to excess at one end of the curve and those scrounging to save every penny at the other end of the curve. It's easy for people to point out and focus on the outliers as you have but the reality is most people have a balance between happiness (spending) and security (saving) and live close to the mean.
The people who are insanely frugal and then say money doesn't buy happiness are people who hoarded money for the wrong reasons. In my opinion you need to have a clear goal or reason as to why you want a lot of money. That could be you want to build an empire to pass onto children, engage in charity work, be able to open a business and grow it etc. These are things which are fulfilling and require work which goes beyond just getting money. Now for people with empty goals such as they want money to afford expensive cars or they just want to hit an abritary number, once they get those things, the happiness will wear off and they'll just become depressed as they now have nothing to work towards. From my experience its these sorts of people, the people who make money their entire goal in life, who say money doesn't buy happiness once they become rich. In my opinion, money doesn't buy happiness but it buys so many more opportunities to find happiness.
But yeah you are right, aggressively saving money for the sake of it especially when you have no children is just completely pointless in my opinion
Key word is "aggressively saving". Saving money is fine but some of these people have no end goal they just save and even if they have kids they probably didn't raise them right because they were always at work so the money they pass down is finished anyway.
May he RIP but look at Steve Bing, inherited $600m in the 80s killed himself by jumping off a building in LA penniless a few years ago.
I understand people devoting their life to their passion e.g. people like Elon musk working to revolutionise the car industry. But to devote your life, neglecting your wife, kids, hobbies and friends, just to try and make partner at a law firm or MD at a bank just seems so cringe. Highly doubt anyone on their death bed thought man my life was a failure because I didn't make MD. Like no disrespect to anyone but I'd like to have bigger achievements in life than just "was an MD at a bank".
Reminds me of the joke of a CEO, trophy wife, and chauffeur. CEO makes a ton of money, but never really sees the hot wife. Chauffeur drives CEO to work/airport, but spends most of the time driving the wife to shopping, carrying her bags, listening to her gossips, taking her to her spa, and pretty much being her best friend, etc. CEO drops dead one day. Wife inherits all the money. But she is even lonelier than before, so she marries the chauffeur. Chauffeur becomes a millionaire, lives in a huge house, and bangs the shit out of the trophy wife and even pop out a few little ones. Now who is the real boss here? The CEO or the chauffeur?
Obviously, it’s the trophy wife. She had both by their balls.
So many people like that CEO in finance, making money for the sake of making money.
It gets to a question of what is the purpose of money. Really there are a few reasons:
1) it helps you do/buy things
2) it provides safety
3) pride
Depending on a persons personality, they might be so anxious/ worried based on their upbringing that they will always save because they are doomsday prepping for something bad to happen. As another user mentioned, it might not be even concrete/intentional, but they have an emotional need to save and no amount will be enough because it’s really an emotional behavior. Pride is another one—no amount will be enough because for many people they view the amount of money they have as a measurement of their self worth or something they want to compete with others on.
I think the way to be happy is what you are describing and #1: view money as a means to an end. It can buy you safety and it is important to save, but there’s a balance. If you save every single penny, you likely aren’t rationally behaving.
For everyone on the board saying people spend in different ways, that is not what OP is getting at - he's getting at the people who (i) are not fulfilled by their jobs and (ii) don't use the money from their jobs to fulfill themselves in other ways (either by material goods or experiences). We all know those people.
I would say there is a small cohort that do it to achieve upper-middle to wealthy class financial independence earlier in life (i.e. the ability to live life luxuriously and retire in their 40s / early 50s). Then there are also people who do these jobs in NYC with a family where unless you are very senior at a place that pays well, life is just expensive. Not just in the keeping up with the Jones way, but sending kids to private school, saving for college, feeding a family, nanny, basic vacations, etc. while working a lot (so needing an expensive place due to proximity) doesn't lead to a lot of outside luxuries (and to OP's next question, yes, I agree, then what's the point).
OP I mostly agree with your post. I think a lot of those people need more self-reflection / potentially therapy and generally get trapped in a prestige / making money vacuum without thinking about it and thinking about why. And doing so would totally destroy them as they would then have no appreciation for who they are and what makes them happy.
Exactly this comment is spot on. I am talking more about the people who make money and do nothing with it and have no plans to. They just keep hoarding like gluttons
Same people let their careers define them and are totally insufferable to work with. The ones that I know at least.
Following. People need to read the book "Die with Zero" the day they start working. I've gone stretches living like a broke boy hermit crab and its no way to live a life.
Saw another comment recommending it above and it made me self reflect over the death of my mum and why I actually made this post. Definitely buying it now.
Simple reason: people who do that are risk averse. Some of them may also be anticipating specific expenses or investments.
I agree that trying to collect resources isn't a bad idea. HOWEVER keeping it all in cash is stupid because you are effectively putting your portfolio 100% into one asset. It's more practical to think of cash as merely one type of asset you can invest in with all of the other typical risk factors (e.g. country risk) in effect.
This question is like asking people why they want to be rich. Seriously? Time value of money. The more money you can hoard today or tomorrow, the more that money will be worth after 10 or 20 years of compounding. Time value of money is how immense wealth is created.
Everyone on here understands that.
OP is talking about the people out there just saving into perpetuity... like what is the point of that? I'm sure that Big 4 dude had a fat investment account but probably didn't realize a single gain to do something fulfilling and that's sad.
I don't personally know anyone in a high-paying industry who has saved every single last dime their whole life and taken millions to the grave without spending some of it. I've never heard of this type of person working in a high-paying white-collar field. Usually, the ultra frugal people who save their whole lives and take the money to the grave are middle-class or blue-collar workers who "build up" their wealth through decades of crazy saving/investing on a middle-class income. They usually become millionaires later in life and want to protect their life's nest egg at all costs.
Contrast this with your average WSO front office worker who is probably earning mid-six figures by mid or late 20s -- the average WSO worker can easily achieve millionaire status in his or her 30s employing even a modest savings plan.
The point is this. Usually when you see a wall street guy being super frugal, it's not because he has a personality disorder. It's because he has a walk-away number that he wants to hit in his mid-40s to retire a few years early instead of grinding another 5 years. Just because someone isn't spending cash in a visible way doesn't mean he doesn't have plans to do so in the future. He just knows his lifestyle will cost $20 million to sustain in perpetuity, and he needs to deposit another $5 million before he clocks out.
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