Tag Archives: rich

Living Rich Cheaply: Have Your Cake And Eat It Too!

credit: freedigitalphotos.net by Marin

A few weeks ago, my wife was debating whether to spend money on something. I forget what it was. I said to Mrs. Living Rich Cheaply, “You can’t afford everything. But you can afford anything,” quoting the wise words of Paula Pant, who blogs at Afford Anything. The basic premise is that you can afford anything that you want, but you have to prioritize what it is that is truly important to you, and cut out the expenses which aren’t that important. My wife, fortunately is a frugal person like me, but she responded by saying, “that’s a good point, so why does your blog’s tagline say that ‘you can have your cake and eat it too?”

Mrs. Living Rich Cheaply makes a good point. So now after starting this blog over a year and a half ago, let me finally explain how the title of my blog “Living Rich Cheaply” and the tagline “Have your cake and eat it too!” came about. Years ago I saw a book that included tips to live “twice as well on the same income” and I thought to myself that I had to have it. I loved the idea that you could in effect live “the good life,” but not have to spend as much doing so.

When I first started blogging, I wanted to share tips on how to optimize spending and methods to save money by writing about credit card cash back and bonuses, shopping portals, discounted gift cards, getting great deals at different stores, stacking coupons, travel hacking, finding hidden gems at thrift shops, buying refurbished items. I also wanted to encourage people to get deals by being patient and to seek quality versus brand names to uphold an image. You don’t have to spend a lot to look great and to have great experiences. You can be frugal and fabulous. When most people hear the word “frugal,” they immediately associate it with deprivation and sacrifice. I don’t think that is the case. Being frugal doesn’t mean that you’ll dress like a bum or that you won’t get to experience things that others get to experience. You can live a happy, fun and fulfilling life while following the tenets of frugality. To steal a phrase coined by another wise blogger, Shannon from Financially Blonde, you can be fancy frugal !

My post Changing Your Money Mindset captures the essence of what I think this blog is about. I wrote that I drive a car with all the latest safety features, that is comfortable, reliable, and attractive (in my opinion). It’s a Hyundai Sonata which I bought used a few years ago. Sure, it may not have all the bells and whistles of a luxury sedan or the acceleration capability of a sports car, but it gets me to where I want to go safely and reliably. What else do you really need? I wrote that we do sometimes go out to eat at restaurants, but it’s not going to be an expensive Michelin restaurant with fancy décor and plating. I also use Groupon and Restaurant.com certificates to get discounts while eating out. In addition, I have found the joy of cooking and eating at home, which I definitely feel is not only lighter on my wallet but much healthier. Instead of going out to the movie theater or going to bars with our friends, we’d prefer to watch Netflix in the comforts of home and to entertain friends at our home or go to their homes. So no, we are not depriving ourselves nor are we making big sacrifices. We are not living cheaply. Instead, we’re living rich cheaply.

While part of living rich cheaply is the ability to have the things that the “Joneses” have, but not to spend as much, I think a big part of living rich cheaply is to not chase after the “Joneses” in the first place. For many of us, it is a race to see who can accumulate the most and the coolest toys. But, sometimes less is more. And sometimes, the best things in life are free. I know it sounds kind of cheesy, but it really is true. Think of the things that you care about most. For me, it’s spending quality time with my close friends and family members. Most of the things that make us happy don’t cost a lot. Remember that the next time you’re trying to keep up with the Joneses. Of course, I am human and do deal with envy at times. But I just remind myself of all the good things in my life. My definition of a “rich life” is no longer one filled with expensive consumer goods or fancy clothes to flaunt my wealth. A rich life doesn’t have to be an expensive life. I truly have all that I need, and I could not ask for more. I can have my cake and eat it too! Because what good is cake if you can’t eat it?

What’s an Extra Million Dollars or Two?

Lance Stephenson, guard for the Indiana Pacers, posing with a million dollars

I listen to a lot of sports radio on my drive to work, and recently all the talk is about whether Carmelo Anthony of the Knicks will re-sign with them or leave. (Yes, I am a long suffering Knicks fan hoping Phil Jackson can turn this sinking ship around). They argue that Carmelo very likely will stay because the Knicks can offer him $22 million a year versus $17 million that other teams can offer him. So for $5 million dollars extra, there is no reason not to stay. Well, for most players, their stated goal is to WIN. If that is the ultimate goal, wouldn’t you want to go to a winning team. I’m not a naive sports fan thinking that ball players should take less money. Sports owners make even more money, so far be it for me to tell the player to take less money. But when your salary gets into the eight figures, does a few million more make that much of a difference? As Bud Fox said to Gordon Gekko in Wall Street, “How many yachts can you waterski behind?” Thanks to Joe from The Free Financial Advisor for mentioning that quote in a comment on my previous post. It’s so true.

It just puzzles me when it comes to that amount of money. Why is more money still the deciding factor?

Of course, the wealthy have a much higher standard of living that I could never comprehend. It takes money to maintain that lifestyle. And I’m sure many wealthy people have seen those who fall from grace and lose their fortunes. Many celebrities and athletes have quickly loss their fortune spending way way above their means: Mike Tyson, Vince Young and Evander Holyfield, just to list a few. Another prime example is Latrell Sprewell who has made $96 million in his NBA career, but is now broke. He infamously rejected a contract offer of $21 million for 3 years. He said, “I have a family to feed … If Glen Taylor [the owner] wants to see my family fed, he better cough up some money. Otherwise, you’re going to see these kids in one of those Sally Struthers commercials soon.” I’d like to see his monthly food budget to see why he can’t feed his family on $7 million a year!

For a million dollars, Beyonce performed five songs at a New Year’s Eve party for Mutassim Gaddafi, son and national security adviser to the now deceased Muammar Gaddafi, a brutal dictator and tyrant. The year before, Mariah Carey sang at a New Year’s Eve party thrown by Mutassim. Many other celebrities who are very famous and very wealthy have also performed for dictators. While many of them have apologized and donated the proceeds to charity, I’m not sure if they’re remorseful or if it was just a public relations move.

When you have millions of dollars, do you really need to compromise your morals for another million dollars?

Another instance where I just don’t get the actions of a wealthy person is with Martha Stewart. The sale of Imclone stock with the use of insider information allowed her to avoid a loss of about $45,000. Martha Stewart is worth millions, why risk getting embroiled in insider trading when a $45,000 loss is just a drop in the bucket for her? Similarly, Raj Rajaratnam, a founder of the hedge fund Galleon Group, was a billionaire so why get involved in insider trading. He will be spending 11 years in prison after his conviction.

When you have millions of dollars, do you need to risk going to prison for more money?

Many who have made millions and are rich and famous may also be arrogant. They don’t think that they can do anything wrong. It is likely that all that power goes to their heads and makes them feel invincible. Another reason is probably because they are mindless accumulators.

What other reasons may cause the very wealthy to continue try to make more money?
　

Is This Still the Land of Opportunity?

President Obama has called the wealth gap and social mobility the “defining challenge of our time.” He will no doubt be speaking about this in his State of the Union Address today. Pope Francis has also shined a spotlight on income inequality. Here in NYC, the newly elected mayor, Bill DeBlasio made income inequality and the “tale of two cities” the theme of his campaign which he won in a landslide.

A while back, I posted an infographic entitled Broke? It Might Not Be Your Fault, which lists statistics and facts showing how it is hard to move up to the next economic rung. One of the main things I love about America is that we have much more opportunities compared to many other places. However, a growing amount of people are pessimistic about achieving the American Dream. I am a big fan of the Horatio Alger stories, the “rags to riches” type stories where those living in impoverished conditions rise from humble beginnings to live a richer life through hard work, determination, courage, and honesty. Recently, Laurie from the Frugal Farmer posted Can You ‘Bootstrap’ Your Way Out of Poverty?, where she cites to a Yahoo Finance article which answers the question in a negative. However, Laurie goes on to recount an inspiring story of how her mother was able to overcome many obstacles to “bootstrap” her way out of poverty. Charles from Getting a Rich Life posted a story about living in government housing and growing up poor, but is now a millionaire before the age of 40.

Hearing these stories definitely inspires you. If someone with these obstacles can succeed, so can others right? Comparatively, the details of my life are quite inconsequential. I was born in NYC to a working-class immigrant Chinese family. Growing up, my family lived a frugal life, but we did not live in government housing nor did we have to rely on welfare. We lived in a multi-generational extended family house which included my family, my uncle, aunt, 2 cousins and my paternal grandparents. We never had cable television, which made me think we were poor and deprived. For the longest time, we didn’t have a remote control for our television. My sister and I would take turns sitting next to it to flip through the channels. Indeed, First World Problems! We didn’t have many luxuries, but we always had food on the table and a bed to sleep in. That’s all you can really ask for.

My parents always told us that a good education and a good work ethic would give us a better life. I received scholarships from some private universities within commuting distance from where we lived, but I really didn’t want to stay home so I chose to dorm at a state university. It might not have been the best decision, financially speaking, but I needed to do it for the independence and it did teach me responsibility. I went to a public state university and received income-based grants from the federal government and the state, but did take out student loans. My parents helped out with the difference. I worked part-time throughout high school and college, but all of that money was for my own personal expenses. After graduating from college, I moved back in with my parents and found a job paying about $32,000. I paid my parents $700 a month for “rent” which helped them out with the mortgage. I didn’t see myself staying in my career track, and decided to go to law school. I chose to go to law school part-time in the evenings, while continuing to work full-time so that I could support myself. My “rent” was however cut to $600 a month. With my degree, I found a job in government which provides great benefits and a good income. While I am no where near millionaire status, I am securely in the middle class.

Many bloggers brought up great points in the comments section of my post Broke? It Might Not Be Your Fault, regarding difficult obstacles some face. Those in rural areas may lack access to opportunities that may be available to others. Those who are raised in a toxic environment, whether it be because of drug abuse or physical abuse, may never see that there are opportunities available to them or encouraged to access those opportunities. Many also face circumstances, beyond their control, where they are unable to take advantage of opportunities that are presented. I did not tell my story to say that anyone can better their lot in life since I was able to do it. While I did not grow up with many privileges or advantages, I did have all the necessities provided for me and a family who encouraged me to improve myself. Surely, much can be done to strengthen the safety net for those struggling and to help them improve their lot in life. But stories of those from humble beginnings who advanced themselves through hard work shows that it is possible for many.

Do you think it’s possible to improve your lot in life? Is this still the land of opportunity?