What's the point of saving money?

You’re right - go max out some credit cards so you can be justtttt like them 

The direct answer is of course - there are a lot of people who live beyond their means. Some out of necessity as they either made poor choices or just had really bad luck. Others because they want something they are unwilling to work or wait for thinking they simply 'deserve' it. 

The saddest, though, are who you described. I've blown plenty of money on shit like you described - but never went into debt to impress my 'friends' or people who didn't give a shit about me. They might be happy now - or pretend to be happy - but it will catch up to them. Look at all the sports players, celebrities, etc. who have crashed hard due to reckless spending. it catches up to you. 

Don't count other people's money. It's the best advice I can possibly give you. it will drive you crazy. Worry about your life, what lifestyle you want to pursue and save/invest/spend accordingly. I will be the first to admit that I used to spend like crazy, not 'caring' about savings because YOLO. Nowadays I still spend - but save consistently high percentages of my income, invest, etc. Part of that is because my income has gone up but I've dialed back my mentality. Saving and investing provides you a better quality of life for the future. Period. 

Never shied away from life experiences I thought were valuable. Not to quote Marvel, but “when you can do the things I can, but you don’t, and then the bad things happen, that’s on you.” I like this quote because it’s not about being a hero. It’s about looking after the little guys. With the little extra couple bucks I save, I can buy food, clothes, medicine, school supplies for kids that don’t have the opportunities of developed countries. Nothing against bottles & models - that’s all fun in moderation. Whatever floats your boat so this is another good thing to do.

The point is to give yourself options down the road. That's not to say you go the extremes and save and invest every penny at the expense of living your life, but being financially responsible gives you options down the road and insurance for when shit goes bad. If I lose my job, I literally don't care that much. Even if I didn't find something else for 12 months, I'd be chillin and whatever principle I've already invested would still be compounding for decades.

Yeah, I sacrificed some experiences in my 20s, but thankfully for me, much of that was shit I didn't care about anyway. I figured out things that make me happy early on (namely travel, fitness/health, and nights out with friends) and spent money on those within reason while cutting out crap I don't care about but others do (i.e. eating out, Starbucks coffee, seeing big name artists at clubs, bottle service, etc.). With the choices I made in my 20s, I'm now in a position where I can semi-retire probably at ~40 (barring a gigantic market correction/stagnation) or at the very least can pursue less intense work or NFP work I'm passionate about without worrying about leaving my higher paying, but higher stress consulting job to pay my bills. 

It's all about balance, and that ideal mix is different for each individual, but your friends will likely be feeling some pain when they have a family and can't afford Little Johnny's college or have to make major lifestyle sacrifices to do so when the time comes. There is 100% value in delaying gratification, but it's hard to see them in the moment.

Everyone else is jumping off a bridge, maybe you should, too.

If you're saving 80% of your income, there's other people saving 95%.

Think long-term. Who will have to better life and less stress in 20 years. Eventually these people will realize there is more to life than Insta followers and how you look on social media. 

I'm gonna have 5 kids and send them all to catholic school.  Shit is expensive

https://www.bestcolleges.com/research/student-loan-debt-forgiveness-can…

No age bracket (including Gen Z and Millenials) has a plurality supporting the full cancellation of federal student loan debt. This doesn't even get into private loans, which the federal government doesn't have authority to cancel (they would have to pay the balance to private lenders). 

More likely than not your friends are going to see their FICO score deteriorate, which will always be a huge problem when they try to get another credit card, rent in another complex or buy a house. This reckless lifestyle will catch up to them. 

I think about it the following ways 

1. Save money so you can make more money which means you can spend more money. If i have 100 dollars, maybe my disposable income out of that portion is 50 dollars. If i invest it, I can hopefully get 200 dollars and then my disposable income is 100 dollars. So save money to improve your lifestyle. 

2. Difference between rich and wealthy. Saving money can help out your kids and your kids kids.

Not sure but maybe the brofessor can chime in. 

Life is about options and flexibility - savings provides you with that. What happens when the next major downturn happens and 50% of them lose their jobs, regardless of performance. I’ve worked through 2. Another will be coming soon enough. Do they have parents that will bail them out? Do they move home and live in the basement? I’ve seen all of that happen. Will they ever be able to buy a house, marry or have kids? I had a college buddy who was a banker at CS and took your friends’ approach. He got laid off in the tech bust and took over 10 years to fully recover. He finally did because he is a smart guy, but he literally moved back home and vanished for years. 

I think this comes down to multiple issues. Some people involved can have one or many; its a vast and very liquid floating scenario:

1. I think we have a bias of only hearing people who are doing things in excess. Almost a survivorship bias, you don't hear about the people being diligent with their money. Brings into question taxes and stuff like that; you can be extremely careful with your money, save up a couple million through your whole life, then you're painted as the "bad guy" because other people did things like go to colleges they couldn't afford so you have to be taxed higher. Not meaning this as anything political or slamming anyone, but I can see where the OP is questioning his lifestyle vs someone who is basically the opposite. 

2. Some people don't know how to save/are all about YOLO. Kind of intertwined with everything. Some people like to live in the moment, and don't think far ahead. As we all know, mostly people can spend money faster than they can make it (sans prob Bezos with the Amazon sales). 

3. some people feel they identify as the "money person". Somewhat similar to my point #5, but some people, even in smaller towns, feel they are seen as "best dressed" or "always has a fresh cut". They look rich, they have to keep that standard up. 

4. Some people have to a certain level of excitement, being in debt and constantly having to balance payments fulfills that for them. I think they see it almost as a game. But also, they could have grown up in an environment like that.

5. For some, spending money on luxury and telling others about it is the way they derive utility from their money. Some people like to be flashy, they don't care about saving money, but they do care about telling people about their super expensive vacation, or the look they get when they drive their new car. 

6. In the long run, they think they can figure things out. Maybe they look at it as, whats the worst that can happen, they go bankrupt? But I always say, people do as they see. If you look at guys like Trump or Jordan Belfort, people think they personally are bankrupt but they also seem to live pretty high. 

7. They would rather live as a king/queen for a day, then a prince/princess for their whole life. I think about this whenever you seen some of the guys who commit ponzi schemes. Take Madoff for example, guys smart enough to know how the whole things ends. He was basically waiting until the music stopped, but he know it would stop. However bad the stuff he did was and however many people he heard, the one thing that can't be taken from him is the memories of how he lived, the luxury stuff, the country clubs, the penthouses. I think there are some people in debt like that, yea they know they can't afford the luxury rooftop bar for drinks, but they would rather have that and nothing done the road. 

8. Money is a psychology. This kind of goes with people not knowing how to save. I think everyone has a certain limit of money to them they consider "petty cash". Could be $5, $10, $20, $100. "I bought it, it was only $20 bucks", "Dinner wasn't expensive, it was only like $100", "got a couple drinks, it was only $50". This type of spending adds up quick. 

Might get monkey shit for this. When I took my Econ 101, my professor said: wealth is what you save, not what you make. 

I think that echoes what Kiyosaki said in Rich Dad, Poor Dad. If your lifestyle elevates with your income, you are still heavily indebted, just in a different sense. Imagine, now you are an MD, and you own 1 Porsche, 2 nice boats, 3 vacation houses, and afford some nice trips to wherever 3 times every year for your family. Your kids go to private school and your wife, who doesn't make a lot of money, buys 2-3 Hermes handbags on a monthly basis. Can you afford that lifestyle? Yes, you can. Are you a rich man? When you lose your job or some Black Swan hits, you may not be anymore.

Here's my view... 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. FYI, I am not overly frugal, I do everything I want / need to feel happy and enjoy life, I just don’t go over the top. I think a lot of folks who live overly “lavishly” and don’t bother to save / invest will end up grinding their who life, and that just doesn’t seem worth it to me.

the point of saving money is for it to be consumed later for a positive life experience or to be the insurance agent of last resort for your family. I do not believe money is a scoreboard so don't care about accumulation for its own sake

read die with zero by bill perkins. there's 2 bad scenarios you can have - the grasshopper and the ant. the ant saves and saves and saves and never enjoys the fruits of his labor while never going bust. the grasshopper lives like there's no tomorrow and gets smoked when some shit does hit the fan. life is about striking a balance between the two, neither saving too little nor spending too little, but most importantly, being intentional about it and not trying to be happy by comparison. sounds like your friends have the positive life experience part down but aren't being intentional about it. sounds like you have the saving aggressively part down but you may be forgoing positive life experiences at the same time. 

on your friends, hoping for a bailout is a fragile strategy and I'm definitely opposed to it, always live within means unless absolutely necessary (e.g. I won't bat an eye if I have to go bankrupt because my wife needs some crazy expensive surgery to save her life). I'd suggest you're not enjoying enough of your money and may be oversaving.

here's what I do for clients and a bit of what I've started to incorporate for myself, the overarching idea is "once you have your shit taken care of spend however the fuck you want to." first, emergency funds. everyone has a different amount. in my case, it's about 6mos of bills + enough to meet insurance deductibles. next, save for retirement, for some people this may be 10% of income, others it may be 60% of income. after that, do whatever you want. sure you may want to save money for "optionality" like if you hate your job and want to pay for b-school, if you want to fund your own venture, but don't just save money so you can brag to your friends how you turned your $70k bonus into $200k with some lucky stock trades. good for you, what's that money going towards? nah, fuck that, your trading account is not an extension of your personality, it's a means to an end. so after I've got my emergencies and retirement savings for the year taken care of, I allocate cash towards other things, at the moment it's a combination of 2022 travel and a down payment on next home/forever home.

I can't tell you how you should spend, but I will say that if you're an oversaver like many of my clientele, you're not likely setting a specific savings goal every year and then actually upping your spending once you've hit it, you just keep socking money away. stop that. do some reflection (plenty of ideas in the book), allocate those experiences to various points in your life, and ensure your money has a purpose beyond becoming more money in an account somewhere

for example: say you've maxed out your 401k, backdoor roth IRA, and have your emergency funds taken care of, what will give you more positive memories in 20 years? if you put $10k into your investments and grew it at 30%/y? or, if you took $10k and did a sick ass trip, whether that's vegas, a supercar experience, a luxurious week in europe, whatever? your ability to retire likely won't be impacted, but you'll be a happier person as a result

It's called moral hazard.  I have a friend who makes well into the 6-figures and still has not paid off his low interest student loan. Inflation is slowly eating it away, plus he has a free call option in case the government ever pays it off.

I had decent savings/investments leaving college because of cheap school+getting lucky trading some internship money. I know if I ever lost my job or completely hate it, I'd be completely fine financially for a while if I had to get by. That safety net makes living life much easier and less stressful which most people can't say.

Speaking of people somehow living way beyond their means, I'm reminded of my childhood. I had a few friends whose parents were bankrupted, but somehow managed to maintain very extravagant lives.

One was the GM of a property fund that went belly up in '08, amid all kinds of fraud and dodgy accounting claims. Retail investors lost a shit tonne of money, many their savings for retirement. He ended up being saddled with the mortgages for several worthless properties and personally bankrupted. Somehow he was still living in mansions, going on holidays, driving a revolving door of luxury cars (started with Audis, went through a Ferrari and a Masarati in the time I knew them). My friends were always so jealous of his son because he had two TVs, a Playstation and an Xbox in his bedroom growing up. 

The other had his own construction company, which was going down the tubes for years before it eventually failed and he was personally bankrupted. I still remember waking up early one day to get water and seeing an aggressive "Income tax past due" statement on their kitchen counter. Again, lived in a massive mansion, had an equally nice vacation home, Audis, rebuilt a classic car, fancy holidays etc. Even after being bankrupted still somehow manage to keep up the lifestyle, although the vacation home sadly went (sucked for me, had some great memories at that place). 

My guess is they somehow just managed to continuously roll over their debt and find new lines of credit, and were comfortable living with creditors breathing down their necks 24/7. 

It's a simple term called "compounding" - over time, money saved today will be worth a lot more.

As to whether it's worth it for you to not go out with your friends now, so you'll have a bigger bank account/investment portfolio in 30 years... well, that's a value call and you're the only one who can make it.  Obviously there is some happy medium between "max out every credit card and have no savings" and "sit at home counting spare change all the time."  But it's gonna be up to you what that is.

Also, maybe your friends don't want kids or a family in general.  That's a personal choice, but you certainly can live larger, on less, if you're not supporting several other human beings.  Maybe your friends have family money to fall back on.