Spending Your Last Dollar on the Day You Die

There was a story run on Yahoo! Finance about a guy who is worth $1.6 million.  The story likens him to someone in the book The Millionaire Next Door.  This guy says "There are two ways to become a millionaire.  You either make a lot of money or be a frugal person.  I've kind of combined those."

So he admits that he has made good money.  Someone working at a job earning $40,000 a year is going to have a tough time becoming a millionaire before the age of 65, even if he is really frugal.  And that is even more true now in the current economy.  It is a lot harder to get 10% annual returns these days.

I have written about frugality before.  I always find these stories fascinating.  I wrote recently about Mr. Money Mustache.

In this Yahoo! Finance story, I found the comments more fascinating than the story itself.  Some people defended the story and said others were missing the point.  Some people really liked the frugality, although some disagree with his policy of not giving any gifts.  Some people stressed the importance of having a good balance.

And then there were other people who made fun of the guy.  They say things such as, "What is the point of living if you are not going to spend money and enjoy life?"  Other comments said things such as "What is the point of saving all of this money when you could die tomorrow?  I want to spend my last dollar on the day I die."  There was one guy who said he lives the same way with 300 bucks in the bank.

Now I am not saying that you should live your life just as this guy has.  I am not saying that you should be so frugal as to walk long distances to avoid the costs of transportation (although some could use the exercise).  But I do want to defend this guy against the rude people making comments making fun of him.

The difference between upper class and lower class is not so much based on wealth as some believe.  It is based on time preference.  A person who sees beyond today is upper class.  A person who is constantly living for the moment is lower class.

Some people are wondering what the point is of saving all of this money.  They say that this guy doesn't enjoy life, but how do they know?  This is a very subjective thing and they have no idea if this guy is happy or not.

This whole idea of spending your last dollar on the day you die is ridiculous.  Nobody knows how long they are going to live, so good luck with planning that.  And I suppose these people have no interest in leaving any kind of inheritance to children or grandchildren.  I suppose they have no interest in leaving any kind of legacy.

But I figured out why some people are making fun of this guy for his frugality.  The people making fun of him are lower class.  They cannot see far into the future.  They also have little hope for the future.  These are the people who's retirement plans consist of playing the lotto each week.

The one commenter who said he lives the same way with 300 bucks in the bank is completely wrong.  He doesn't live the same way.  He is lower class.  He is so far from the millionaire status, that he has given up.  He has little self worth and he sees no way that he could ever achieve millionaire status.  He is right in thinking he can never become millionaire, at least in terms of today's purchasing power.

Most people I know do not like their jobs.  Some people really hate their jobs.  They are stuck.  Some people are content with their jobs, knowing they can't find anything better.  But they would still quit their job if they struck it rich.  There are very few people who truly love their job.

Yet this guy in the story quit his regular job and became a stand-up comedian.  How many people under the age of 65 do you know who could just quit their job at any time and be fine, financially speaking?  There are not many.

These commenters making fun of this guy's frugality are losers for the most part.  They say he is not happy, but he was able to quit his job and do something that he likes.  The commenters making fun of him are stuck in their miserable jobs while they think they find happiness in spending all of the money they earn.  They will never be in a position of financial freedom.  They will be stuck in their consumeristic world, while continuing to make fun of those who plan ahead in their lives.

In conclusion, I agree with those who say a good balance is important.  At the same time, I think frugality can be a good thing, as long as you step back and see the big picture once in a while.  While it is more difficult now than it has been in the past, saving money can lead to financial freedom in the future.  This is only for the upper class.