Are You Spending Too Much? (FIRE Edition)

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 13 March 2019

⏱️ 29 minutes

🔗️ Recording | iTunes | RSS

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Summary

#244 How we can use filters to better manage how much we spend and make sure our spending has a meaningful impact on ourselves and the world. Thanks to EveryPlate and LinkedIn for sponsoring the episode.

For show notes and more information on this episode click here.

[0:16] The FIRE movement and how much you need to retire early.
[1:23] What are we supposed to be seeking?
[3:23] How do we define the “bare necessities?”
[8:58] The superfluous things in life are what we spend our money on.
[11:12] Finding joy vs. chasing pleasure.
[13:51] Skills to reduce spending in order to retire early.
[15:41] Establishing filters to lessen our spending.
[18:51] Rethinking materialism.
[21:01] There will always be more.

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Transcript

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0:00.0	Welcome to the money for the rest of us. This is a personal finance show on money, how it works, how to invest it and how to live without worrying about it.
0:10.0	I'm your host David Stein today's episode 244.
0:13.0	It's title, Are you spending too much?
0:16.0	Last week in episode 243, we discussed the Fire Movement,
0:20.0	the Financial Independence, Retire Early Movement.
0:25.0	We talked about how much you need in order to retire early.
0:29.8	You need sufficient that you can earn enough from investing to cover your living expenses
0:35.0	and allow the remaining principal balance to grow by the rate of inflation.
0:40.0	If you can do that if essentially your net worth is growing by the rate of inflation that means
0:45.4	that your expenses or the amount you can spend over time will grow by the rate of inflation. Of course there are the potential as Susie Orman pointed out of
0:57.2	unexpected expenses and so it's important to have some type of buffer and there is the impact of a large market loss.
1:07.0	Early retirees need the flexibility to be able to reduce their spending if their principal balance drops.
1:16.0	But how much do you need to spend?
1:19.0	How much do you need to be happy? Seneca, the Stoic philosopher wrote to Lucilius in letter
1:26.8	16, it is clear to you, I'm sure Lucilius that no man can live a happy life or even a supportable life without the study of
1:36.4	wisdom. You know also that a happy life is reached when our wisdom is brought to
1:41.9	completion. But that life is at least
1:45.0	endurable even when our wisdom is only begun. Away then with it all excuses
1:51.0	like I have not enough.
1:53.7	When I have gained the desire amount then I shall devote myself to philosophy.
1:58.6	Yet this idea which you are putting off and placing second to other interest should be secured first of all.
2:06.0	Therefore one should not seek to lay up riches first.
	...

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