I am a hypocrite!
I am a savings hypocrite and I am okay with it. I am a blogger and a fan of the financial freedom road. I get behind sites like Mr. Money Mustache and Physician on Fire. I am pumped for the guys who go for the Financial Independence Retirement Early (FIRE). I think it’s great and it is something I strive for, but I am a hypocrite. I am a hypocrite in my savings rate.
Savings rate hypocrite
What makes me a savings hypocrite? The fact that I do not save what other bloggers do, but want to be. I do not save 50% of my income and live on $30K a year (closer to $60K for PoF). I live on $144K a year though $60K of this has been housing costs. Something neither of the above mentioned have.
I have managed to save 10% of my pre-tax income in 2014, 33% in 2015, and 27% in 2016. This is not bad (actually when I did the calculations it made me feel better about our savings! Part of the power of tracking the numbers.), but it is not the extreme numbers of the other guys.
Savings hypocrite
I am okay with being a savings hypocrite. I think by striving for a goal, we achieve. Without a goal, we are destined to fail. Even if I only get half way there and save 25% instead of 50% and retire by 50 instead of 40, that’s okay.
The road to financial freedom is different for each person. I read an article by Reza Aslan on CNN. He was discussing why he has chosen Islam as his religion and why he thinks following one religion (whatever it may be) is the easiest way to find faith.
He summed it up like this, we each dig a well to obtain water. The well may be different, but the water is the same (there are many roads to the same path in essence). Why would you dig 6 one foot wells to get water when 1 six foot well would likely be more productive.
I see this as saying, we can all discuss our paths and while MMM or PoF may have one path (and their paths even differ) mine may be a bit longer. So I can enjoy and support the idea of early retirement, but it does not mean I have to retire by 40. I can discuss financial planning and saving (both of which I do), but I am not a failure if I am not saving 50% of my income.
It should be the same for all of us. The path may vary, but as long as we are all intending on improving our financial and personal lives and take steps on the road, we will get there. How quick just depends on what we want from life.
Are you a hypocrite? Does reading financial sites discourage you?
Great post! My savings rate isn’t approximately 20% post tax with a goal of 25% by year end. I’m good with that right now because I’ve also got a pension coming. At the same one, I want to be able to do the things I want to do now look like travel with my children. Those experiences were meaningful to me as a child and I hope they do the same for my kids. Maybe I’m just trying to justify my “lower” savings rate, but I’m okay with that. Again, awesome post. I’m glad I found your blog.
I have a pension coming too!
My goal is to get to a point where I can go 60% in 10 years and then ride out the rest of the days (if I don’t get burnt out). In that time I figure I can travel in an Airstream with my kids.
No need to justify anything and thanks for checking out the blog!
Take away the mortgage, disability, and term life and our spending is pretty much equal. You’re no hypocrite; you just haven’t had a long enough career to make those payments optional.
You’ll get there in due time.
Cheers!
-PoF
p.s. We chatted with a family from Santa Rosa in Iceland the other day. Good people!
Glad to hear you met one of my neighbors. Quite friendly people up here. We have been pleasantly surprised in the last year that we have lived in SR.
Hmmmm, the mortgage, disability and term life are keeping me from FI though. So it will be a while until I retire! Thanks for the uplifting words though. It does make me feel like I am closer than I think.
I think the savings rate just completely depends on how much you make. A 50% savings rate isn’t some holy grail that everyone should chase after.
If you’re pulling in $200k a year after taxes, even a 25% savings rate means you’re banking $50k a year!
True dat. $50K a year is not a bad savings plan. Part of the benefit of being a high earner is I can spend a bit more, be a little less disciplined, and still make it to the financial independence finish line.
As you said, I think it’s important to see different perspectives and see which one works best for you. You may be the MMM or Live Free MD style and live on half (or less). Or you may be the WCI style where you live like a resident for a few years than save 15-20% of gross income. Both of these methods work.
Definitely more WCI lifestyle, though I don’t plan on heli-skiing ever.
Great post! Love this! Thanks for sharing.
Thanks for checking it out!
It doesn’t discourage me to see others with a higher savings rate, or living on a lower income. I see them as making a different choice than I do. I don’t calculate savings rates because I don’t find them useful information to achieve my goals. Also my goal is more FI and less RE, so I’m fine with a longer time horizon. If others find savings rates helpful to them, or have more aggressive time horizons – great! I wish them success.
Interesting…not watching savings rates. It is often revered as a holy grail…after all a dollar saved is two or four earned depending on who you ask. I suppose the RE definitely increases the need for aggressive savings. I would like to retire early but am also okay working another 10 to 20 years if I can do it part time.
Oh, interesting! At the end of the day it’s all about stretching your limits while doing what’s best for you. It does depend on what your income looks like and what area of the country you live in, too. Don’t let other people’s savings rates discourage you. I’ve had PUH-LENTY of hypocritical moments (drinking bottled water, buying Starbucks coffee, etc.). Nobody’s perfect, but it’s important to acknowledge it. 🙂
Ah drinking bottled water (can you believe they don’t even give you the fluoride supplement for free like the city!) and Starbucks…those are some real luxuries. 🙂
I agree. Nobody is perfect and understanding where you fall on the spectrum is important. Thanks for checking in.
I don’t think you are a hypocrite at all. Being smart about money doesn’t mean saving 50% of your income. It’s about making conscious decisions about what to do with your money. We save probably 15% of our income and for us that’s all we can do right now. When the mortgage is done in a couple of years we will do more. I love reading other people’s stories but my journey is my journey and the judgemental sites can take a hike as far as I am concerned.
There is one site that consistently berates readers for wanting to own their own home. I think seeing your home as an investment can be problematic – but come on.
One Dad
I have no problems counting my home as an investment (at least a slow growing investment like bonds, without necessarily the security). If I sell it, then the money is free to use again. I consider the equity of my home in my net worth for this reason.
That is great you are saving 15% and your mortgage will be paid off in a few years. I am likely 10 + years from being mortgage free, and can imagine the relief of actually being debt free.
Avoid the noise and the negative. It is a good philosophy both in life and blogs!
Thanks, great article.