Spending Mistakes During Our High-Income Years Cost Us $1.3 Million

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8 Responses

  1. Mark says:

    Here are some other budget busters you might consider https://www.yourmoneypage.com/family/fam_lbb3.php

  2. Great post! It is amazing how some of those smaller expenses we often don’t even think about (like work lunches) can add up over time.

    When you are making good money and working very hard, it’s easy to rationalize some of those truly optional costs that make your life easier as necessary. When I was working in the big city I had co-workers who took cabs everywhere rather than the subway, bus, or walking, because they could afford it and it made things a little bit more convenient. Everyone is free to make their own choices, but if they were to run those numbers through your calculator, the financial impact of those decisions would be staggering!

    • Joe Freedom says:

      Agreed! The key is to have a fully informed understanding of the cost/benefit equation. Sure, taking cabs is easier than the subway, but if you knew that it would cost you $1mm in retirement would you still do it? A lot of folks don’t grasp the long-term cost of threat short-term consumption habits. Thanks for the comment ROMT!

  3. Arrgo says:

    If you are making big bucks at a time consuming job, I can see the need to outsource some things just to give yourself a break. But in many cases its probably excessive. Over the last few years I have really started to question and challenge everything. Even if you can “afford” it, what are you getting for your money? I don’t mind paying what’s fair if I need something, but I dont want to let them get over on me either. Like you say, its easy to just do whats normal and expected these days and follow the herd mentality. All the marketing is more prevalent than ever. You dont really need as much of this stuff and you have been led to believe. Its almost like mind control. Learn to fix things and do more for yourself. I’ve developed a bit of rebel attitude and resist enriching these billion $ corporations whenever possible. And like you mention, if you can invest the difference the long term gains can be huge.

    • Joe Freedom says:

      Right. Outsourcing tasks when you’re making big money can be a rational economic trade-off; my point here is to use my experience and data to let folks know how it can really add up, and what the true economic cost may be over the long term. No doubt that these expenditures gave me some much-needed relief during my high-income years, but I also know that if I had appreciated the true long-term economic cost at the time, I would not have accepted the deal. And I’m someone that typically would think about those kinds of things!

      Thanks for the comment Arrgo!


  4. Joe, I appreciate the work that went into this analysis! It’s very interesting to see your take on all the unnecessary expenses from your Biglaw career. When you look back upon it now, do you think that the money you spent on outsourcing these tasks is correlated to your ability to continue a Biglaw career? In other words, if you had cut these out would your Biglaw career have been shorter?

    • Joe Freedom says:

      Biglaw–thanks for the drive-by and the note! I think it all depends on your mindset and expectations. If I had known at the start that my indentured servitude period would be limited–even if it was “limited” to 12 years or whatever–I think I could have foregone these pain-killers without too much effort. But I didn’t know that, so these are the areas where I fell into the trap of using my income to ease the pain of bondage (thereby increasing the bondage period of course). While I was always focused on leaving this particular application of the profession ASAFP, early on I was not approaching it with the calculus of reaching an FI number (25 or 30x annual spending, whatever target I would have decided upon at the time), and even though I was very much attuned to the idea of future value of expenditures, these smaller ones slipped by. If I had been in a situation where I was telling myself “well, you’ve got to do this for 30 years,” then no doubt foregoing these types of little pleasures would have likely shortened my Biglaw career. Hopefully blogs like yours and mine are getting the word out that you can significantly reduce the entrapment period if you are so inclined, and that knowledge creates power to REALLY ramp up savings, including in some of the smaller “inconsequential” areas like the ones discussed here. If I had been reading blogs like ours back then, I feel very confident that this FV of $1.3mm would be in my bank account in 23 years.

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