Why and How to Make Yourself Poor

Why and How to Make Yourself Poor

So apparently it’s socially acceptable to tell people you’re poor.  Don’t get me wrong, I love when PF bloggers make debt announcements.  Their announcements take courage.  It’s awesome when they’re working your way out of debt.  But for most people, being poor is just a permanent way of life and they are just fine venting their problems to the world.  All of my life, it’s been almost cool to go around shouting about your money woes.  So, of course, I wanted to fit in to some degree.  Heck, even today, people still think a person’s weird if you actually save a a good portion of your income.

 

So how can a person fit in (be poor) without really being poor?

 

Eureka!  I make myself poor by automatically investing a sh*t ton of money into equities!  I’ve been investing since I was 10 but putting it on auto-pilot would assure I wouldn’t ‘hold some back’ to spend senselessly.

 

“Hey, man, you wanna go-in to buy an Xbox One?”  You can reply, “Sorry, bro, all my money’s gone!”  Ooooh, instant respect gained!

 

P.S. Don’t really say, ‘bro’.

 

Autopilot Investing

I invest a huge portion of my money so I never really have a bunch of cash just lying around.  I used to joke with a girlfriend that I didn’t have money because I spent it on my mutual fund expense ratios.  “That’s not really spending it, Will.”

 

Right now, I save 85% of my income.  Most of that gets invested in equities.  I save 50% in my Roth 401(k), 10% into my Employee Stock Purchase Program, $5,500 annually in my Roth IRA, and the rest of what I don’t need to live off of in a taxable account.

 

So essentially, I’ve severely restricted my money wasted possibilities.

 

Our Big Secret

We can make ourselves essentially poor so we live like everyone else.  Although in reality, you can have a pile of cash set on autopilot. The fact is, you don’t have easy access to the majority of your money.  So this helps you stay on track with your spending and it helps you blend in with the crowd.

 

How to Be Poor for Real

You really want to be poor?  My advice: rent a Ferrari while your credit is still okay and promptly park it in a lake.  Follow that up with replacing your toilet paper with ‘hundies’ – yes, even the guest bathroom.  Next, you can use nail polish to paint your bedroom walls.  Would be sparkly, I bet.  And finally, BASE jumping in a national park will get you a $2,000 fine so jump on that opportunity.

 

To Wrap

I don’t really suggest you pretend you’re poor just so you can fit in with everyone else.  But reducing your liquid cash to a lower level is smart and it’ll help you match lifestyles with your less money-oriented peers.  Engineering a life where you have less liquid cash can be a great thing.  I recommend you automate as much of your income as possible while still maintaining a high quality of life.  This will prompt Vanguard to send you a Christmas card and put you at the cool kids table at lunch.  Automate on.

 

 

-Will

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Featured image courtesy of Hakon Thingstad

43 Comments

  1. I’ve been telling people I just prefer freedom more, but that’s not getting me far in the “cool” department. I’ll switch to “Poor, bro!” and see what happens ;)

    Reply
    • Thanks for the comment!

      In the last paragraph, I wrote a person shouldn’t really pretend (lie) and say that they are poor outright. But saying that you don’t have cash available for an activity (because you’re investing it instead but they don’t need to know that) is honest and people will relate to you better than if you say you’d just rather not spend the money.
      Will Lipovsky recently posted…How to Avoid a Financial HangoverMy Profile

      Reply
    • That’s awesome! I haven’t inflated my lifestyle much since graduating college and I honestly don’t want to. FI by 30 sounds more fun than daily lunches at Panara. Sorry colleagues.
      Will Lipovsky recently posted…Optimum FrugalityMy Profile

      Reply
  2. Right on, “bro.” It’s definitely societally acceptable to complain about money, but get your head on straight and stop wasting it every friday at the bars at saturday at the mall, and you’re now cheap and no fun. It is what it is. 85% is a pretty awesome savings rate, so seriously well done.
    Ryan @ Impersonal Finance recently posted…the right time to have childrenMy Profile

    Reply
    • The weird thing is that it’s not socially acceptable to talk about how much money you have! That’s also one of the reasons why I haven’t published my net worth.

      Fun fact: my actual monthly expenses are far below the Belgian poverty threshold and probably will be for the next few years to come, but my savings rate far outstrips that of people earning three times as much as the poverty threshold.

      Reply
        • Haha, maybe you’re just the American me! :)

          I’m not planning on buying a house, but it will probably happen sometime in the future. Housing prices are extremely inflated at the moment (because of oversubsidizing and the fact that Belgians see it as the best investment ever), so if and when there ever is a market correction, I’ll jump on the bandwagon.
          No More Waffles recently posted…My Only Rule For Financial IndependenceMy Profile

          Reply
  3. As always, I love this post will. Investing since you were 10 huh? That rocks… you’re going to be a rich, rich man…and you know what. I bet you’ll stay humble! I don’t live poor. I’ve got a nice house and I do enjoy going out here and there, but all in all, I do save quite a bit. Thanks for yet another awesome read!
    Josh @ CNA Finance recently posted…Look In The Mirror | You’re To Blame!My Profile

    Reply
      • Do I have a stalker Will? lol… thanks for the comment. Unfortunately the BBQ never came to fruition. Just not enough pf bloggers in this area. I know you’ll be rich. Anyone that saves 85% of their income really has no choice. The coolest thing though is that from reading your posts, I can tell you’re already rich in non-monetary ways. See ya around brotha man!
        Joshua @ CNA recently posted…Delaying Motherhood: Smart or Selfish?My Profile

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  4. My boyfriend and I had been considering moving into the basement apartment in his mom’s house, and she kept asking if we could afford it. She was 100% convinced that *everyone* lives paycheck-to-paycheck (just because she did), and didn’t believe we had any savings. I just shook my head. She ended up renting to his brother who truly had no savings and stopped receiving rent. Automated savings are great, and I’m glad to have friends and family that understand that we value saving so much.
    E.M. recently posted…Being Grateful: Thirty-Fifth EditionMy Profile

    Reply
      • She was just ignorant to finances on the whole, sadly. I guess she thought her son was destined to the same financial fate as she was (in debt and never getting out). It’s just sad how prevalent these thoughts are that she questioned how financially responsible we were. We were making more than enough to cover rent, and my boyfriend broke down our budget, but she refused to believe it was possible to save on our salaries!
        E.M. recently posted…Being Grateful: Thirty-Fifth EditionMy Profile

        Reply
        • That’s really unfortunate. It’s kind of how when I was a little kid, older people would pat me on the head and give me an ‘aw, isn’t that cute’ look whenever I talked about working hard to save money.

          Sounds like you wouldn’t have liked living with his mom anyway! You two are quite different!
          Will Lipovsky recently posted…Optimum FrugalityMy Profile

          Reply
  5. “Next, you can use nail polish to paint your bedroom walls.” – Or printer ink… worth its weight in gold, if gold was twice as expensive.

    Nice post – keeping money away from my conscious brain has always worked out well for me too.
    PK recently posted…More Signs of the Thawing Labor MarketMy Profile

    Reply
  6. This post is funny, haha!!! I kind of act like I’m broke… I will limit my spending etc even though I could probably just go out and buy most things I wanted. My spending has gone a bit out the window as it’s the last week and a half in NZ so I’ve been treating friends to lunches, took my sisters out to breakfast, did some birthday shopping for them etc. Stuff I wouldn’t usually do so much, but I don’t know when I’ll see them all next, maybe in a year, so I think it’s a nice gesture.

    I do find it a bit hard to relate to a lot of people my age who are working for only a little above minimum wage for full time hours. I went to a party the other week and all people really seemed to talk about is how little money they had (while they drank considerable amounts of booze $$$$$)…

    My goal, when we’re ‘living’ overseas (i.e. after this initial three months of travel) is to spend less per week than I did when I was a student and studying and save the rest :)

    Once I have things set up in Panama, I will look into investing, but for now I am just building up some cash.
    Christine Berry – Wealth Way Online recently posted…The Emotional Roller Coaster of FreelancingMy Profile

    Reply
  7. It’s kind of funny that most people’s definition of poor is not having flashy clothes or the newest gadgets instead of how much you have (or don’t have) saved. I’ve never really had conversations about money – I think people just assume I’m poor and avoid bringing it up. It works out great for me – I don’t have to participate in conversations about the cutest new shows a coworker bought on sale for $200 or which new Michael Kors watch I think a friend should buy.
    Autumn @ The Barefoot Budgeter recently posted…New Challenges Bring New OpportunitiesMy Profile

    Reply
  8. Excellent post, Will. I think you’ve hit on something that hasn’t been explicitly addressed (or I just haven’t read it if it has). I really think it’s odd when people follow financial advice of broke people. I remember reading a book (I don’t remember which one) where the author requested the financial statements of the advisors who were soliciting his business. He said that if they would provide them, he’d analyze them, and then determine if they’re so well off that he’d benefit by using them. I think this is just fantastic. If you want help becoming wealthy, get advice from someone who has wealth. It’s that simple. I don’t get the whole “respect for being poor” thing that’s going on.
    Natalie @ Financegirl recently posted…Is Selling Your House Without A Realtor A Good Idea?My Profile

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  9. I really enjoyed this article. So brilliant, and true, and sad. I get a lot of pushback, and at the very least, really strange looks from friends/family when we say we choose not to spend our money on something. I’ve had much more luck saying “We just can’t swing that right now” and leaving it at that. But recently, I’ve found that sharing our goals sometimes inspires people – most are shocked to hear we will have our mortgage paid off this year. And then I can just say – we buy whatever we want, but not everything we want.

    Reply
    • Hey, Samantha! Thanks for stopping by!

      That’s awesome you’re inspiring people by sharing your goals! Letting people know the method behind your madness usually goes 1 of 2 ways: they become jealous or they become inspired. It’s how people respond to wealth in general, I think.

      “We buy whatever we want, but not everything we want.” That’s an awesome saying.
      Will Lipovsky recently posted…How I Doubled My Car’s Fuel EconomyMy Profile

      Reply
  10. My husband and I found out the real importance of living below our means when we had a couple of bad life event years (job loss, medical issues, 2 paid off cars getting totaled, home repairs, and 2 high schoolers!) and we didn’t have to ask for help. Our savings is now mostly depleted but rather than accept defeat we are getting side gigs to supplement our income (meaning 2nd jobs just to pay our savings accounts). I’d rather work and earn than not have that safety net should it be needed again. Hope it won’t but live like I know it will

    Reply
  11. I had an ex girlfriend who used to get pissed when I told her I was “broke”.

    “You know you’re not broke Ced!”

    I had to think on those terms even though I had money in the bank otherwise I wouldn’t have been able to save anything. Once my checking account was low, I said I didn’t have money to go out or whatever. You can’t think about your other accounts because it tempts you into dipping in them. Great article.
    Ced@FuggingDebt recently posted…14 Quick Ways to Increase Cash Flow to Pay Off Debt FasterMy Profile

    Reply
  12. Hey Will,
    Great post…it’s sometimes tough to tell people (people who actually know you have a lot of money saved up) that you can’t afford something. How do you generally get around this? If you say, “I’m just not choosing to spend money on a movie tonight because I’d rather invest it in my brokerage account”, you might come across as offensive. Tough balance indeed…
    wes@GenWiseWealth recently posted…Wealth Building Haters – 3 Ways They Try to Undermine Your ResolveMy Profile

    Reply
    • I think the only way around it is to take as much control as possible of your social situations. If you’re the one making the plans for the group, then you can suggest cheaper/more creative ways to spend time. But first, of course hangout with people who don’t brag about all the money they spend.

      That’s what I try to do, anyway.

      Thanks for the comment, Wes.
      Will Lipovsky recently posted…What Would the World Look like if Everyone Was like You?My Profile

      Reply
  13. Awhile back I had a friend who made six figures and never had money. I couldn’t understand it until I learned she was investing most of it. So she didn’t have money to waste drinking it away in a bar. She budgeted with the idea that her investments were required debt payments as if she was indebted. I say whatever works to keep one motivated.
    Jason @ Phroogal recently posted…How To Save On Back-To-School SuppliesMy Profile

    Reply

Trackbacks/Pingbacks

  1. The DQYDJ Weekender, 07/19/2014 - Don't Quit Your Day Job... - […] First Quarter Finance, an interesting post about how to live well below your means on autopilot – for reasons …
  2. Finance Roundup #16 - 07/25/14 | + New Font! - Financegirl - […] Why and How to Make Yourself Poor by Will Lipovsky via First Quarter Finance […]

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