Investment strategies for an ultra frugal person?


I'm in my early 30s, unmarried and live an extremely frugal life. I
basically save 90% of my paycheck and my net worth is around $700K
with no debts.. I do enjoy life and travel etc., but I know how to do
so very cheaply. In other words I live a very respectable life, I just
know how to find really good deals to save money. For example, one of
my hobbies is accumulating free frequent-flier airline miles without
actually flying through credit card offers. I now have enough airline
miles to travel around the world 10 times for free.
Some may call me cheap, but I think of myself as smart I don't waste
money on purely materialistic things like luxury goods. My priorities
are education, culture, and helping people.
I figure if I continue with this lifestyle, in the next 40 years I
will amass quite a small fortune. At this point I'm not a big fan of
giving money to charities. I prefer to give them my time, as I have
volunteered for many over the past years.
What do you think I should do? Keep living this frugal life or start
spending my money? But what to spend it on? I know this may sound like
a rambling, but I'd be curious to hear any advice you may have. I'm
sure things look a lot different when you get older than they do when
you are in your early 30s.
Reply to
Homer Simpson
I would say "Go for it!". Accumulate as much as you can. You'll be able to retire earlier and live a better life when you're beyond your earning years, both because of your frugality and your accumulations.
Reply to
Gary
Better to use cards with cash rebates IMO, since miles are ever harder to use and with depreciating value. Hard to believe a frugal person could generate such miles unless charging rent to an extravagant mansion (or business expenses I suppose).
You can set your retirement IRA's to go directly to approved charities at your death, without paperwork of wills or anything. And with increasing life experience you may want to change the recipients anyway to more of what you perceive as root causes. While young you want to oil the squeaky wheel, but later may find you are prolonging dependancies and building feelings of entitlements. Bailing out a leaky boat rather than letting it sink and get rebuilt... tough love, etc.
Good point. If you have the time, travelling may be better now than later. Destinations tend to fade into more congested, expemsive, and boring places. Sure, you may have more time later in life, but less bullet proof health may make it less fun.
Reply to
dumbstruck
While I am not nearly as frugal as you, I have a somewhat same mindset. I am in my late 30s and have correspondingly a bit more $$$ than you, but similar in principle.
You stated your question in a funny way, but it is a valid one.
I think that you can continue to be frugal and just enjoy investing (reading financial stuff, thinking etc). There is nothing really wrong with your lifestyle, and other people who make less money, live just like you, but without the extra savings.
At some point, you may get yourself some trinket like premium ice cream, just to balance your life a little better. You have the luxury of having savings so you have options in your life.
I would also consider early retirement, if I were you. You can be frugal and enjoy a free life and have some money making ventures to keep you flush with money.
i
Reply to
Igor Chudov
Education is a good start. If you can find some investment that will get people working in this economy, you will do better than most charities.
-- Ron
Reply to
Ron Peterson
There is no reason you cannot enjoy life and invest profitably in areas other than stocks and bonds, such as real estate, at the same time. For example, you could buy a condo on the ocean, or some desirable resort area, and spend holidays there. Then, when you are tired of it, put it into the hands of a rental manager and rent it out to tenants. It could turn out to be a very good investment in the long run. At any rate, buy a house or condo as your personal residence as soon as possible. Then think about using extra cash to pay down the mortgage. When you retire, you will be way ahead if you own a house or condo free and clear.
Reply to
Don
My bent is philosophical - you're asking for the purpose and meaning, or more simply, the proper use and deployment of, life. I know it has very much to do with oneself, with the ultimate succes of one's values and ethics. Just for a twist on the topic, look at life from that point of view. What courses of action could you take to improve yourself above your current levels? It's a bit tough, because one doesn't know exactly what is "above one's current levels" and one must somehow accurately extrapolate an answer, then test it. IOW, looking at "how to accumulate knowledge" instead of "how to accumulate wealth" places (material) wealth correctly into second place behind knowledge. But wealth can buy knowledge, in many ways, such as time. Confucius probably had a better handle on the relationships of wealth, power, and wisdom than other philosophies. But real wealth is wisdom, and material wealth flows more easily with wisdom (if one wants it to); material wealth can support wisdom and it's acquisition, if one uses it wisely.
Also, watch out for the GD divorce courts. Get a pre-nup, no matter what, and try to hook up with some babe who has paychecks and assets at least comparable to yours. Argue about the pre-nup while you're still sweet on each other, not when you've each lawyered up against the other and have been told not to communicate with each other. Watch out for common-law stuff, too. It is all about "Who has more money?" When that has been established, it is about, "How much does the less- wealthy partner [she] get?" And as a friend of mine once said, "They really clean you out!"
Of course, with great wisdom, one can make a very wise marriage, if one wishes to.
Reply to
dapperdobbs
Depends on whether you want to die rich (leaving it to others), or dying poor (spending it at the same rate as making it). Remember, There are no pockets in a shroud...
If your last point is true, then you're half way to fulfilling the purpose in life. You know what "The Book" says: ...
Luk 12:15: ... for a man's life consisteth not in the abundance of the things which he possesseth.
Luk 12:16 - 21: And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully: And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits?
And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods. And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry.
But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided? So is he that layeth up treasure for himself, and is not rich toward God.
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Reply to
Zrupfter
I would call it presumptious.
No wife and no kids is much better than a bad wife and spoiled kids.
Not everyone has a happy marriage.
i
Reply to
Igor Chudov

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