The Nonconformists’ Guide to Personal Finance

My short life as a daytrader
In my second year of college, I decided to take out $10,000 in student loans and become a daytrader. I could earn far more than the low 4% rate the loans came with, and I planned to finance my education with the winnings.

Sounds like a great idea, right?

There I was, hanging out in the school library, taking up two or three monitors with stock tickers running across the screen and Excel spreadsheets tracking my trades. A copy of Barron's would be spread out beside me, and the Wall Street Journal wasn't far away.

So how did it go? Well, there were a couple of problems.

  1. Real-time trading was hard to do in 1997. Back then, the internet was up and running well, and Datek Online had just launched, but real-time trading was still restricted to people with a lot faster connections than my school library had.
  2. Apparently, the school library was not designed for my exclusive use. For some reason, the library staff grew weary of my hanging out in the library all day, taking up three computers. I tried to play it cool when they asked me about it — “Oh, is there a problem?”— but in the end I was put on library restriction: I could use only one computer at a time, and if others were waiting to do academic work, the stock trading would have to stop. Not wanting to pay for a better computer and connection at home, I finally gave it up.

Fast-forward ten years, and I haven't done any stock trading since then, but I've managed to choose unusual paths most of that time:

  • I lived in West Africa for four years, working as a volunteer for a charity without taking any salary.
  • I've worked as an entrepreneur for most of my adult life — ten years and counting without the dreaded “real job”.
  • After spending so much time overseas, I've found that I really enjoy traveling to places most North Americans never go to, so I recently set a goal of traveling to every country in the world before my 35th birthday in 2013

Each of these experiences has taught me a lot about personal finance, and in a few important ways, my belief in unconventional living has carried over to how I handle money. I've made a lot of mistakes along the way, but I've also done a few things right.

With that in mind, I've written a two-part summary to explain more about how I handle my finances. While I don't expect that anyone will adopt my own system in full, I do hope that this summary may help others who see the world similar to the way that I do. My thanks to J.D. for providing a forum for this summary here at Get Rich Slowly.

Back to basics
First of all, I'd like to think that most of what the GRS site advocates — and what GRS readers consistently practice — represents a great start to a nonconformist approach to personal finance. Sadly, the majority of North Americans are woefully under-informed about financial matters and do not set savings goals.

Simply by planning and taking deliberate action with your finances, you are already in a league of your own.

Further, as different as I may be, I am an advocate of most of the basic financial advice presented here on GRS and in other like-minded publications. Some financial advice is fairly generic, but there really are some good principles that are true for everyone.

For example, I believe in:

I think of these things as The Basics. Simply following The Basics will put most of us far above the curve.

Also, I am generally skeptical about retirement as it's commonly defined (more on that later), but I am even more skeptical about Social Security. If you're under 50 years old, I don't recommend you count on Social Security for anything. Consider those payments you make each month as a parent or grandparent tax.

Where I diverge from the conventional wisdom is over the issues of debt, focused spending, home ownership, traditional employment, retirement, and charitable giving.

Here are a few of my principles — and please, feel free to take them or leave them for yourself as you see fit. I don't make judgments about the choices of others; I only think it's reasonable that each of us should carefully consider our own motivations and priorities. As J.D. says, “Do what works for you.”

#1 — There is no such thing as “good debt.”
Finance books and magazines often talk about “good debt,” in the sense that a long-term mortgage is considered a good thing to have. Depending on your perspective, a car loan or education loans may also be “good.”

Well, this is probably the only thing in the world I am conservative and old-fashioned about, but I happen to believe that all debt is something to worry about. While watching many friends accumulate huge levels of debt buying cars and houses, I have lived my entire adult life debt-free.

This has occasionally meant going without something or not buying an expensive car (I don't own any car at all now), but the real secret is that choosing to live debt-free is no sacrifice at all. Even though I work as an entrepreneur and have never had a stable income, I also don't have to worry about falling behind on mortgage payments or watching credit card finance charges rise every month.

#2 — Student loans? No thanks!
Aside from the short experience of daytrading with my undergraduate loan money (I actually came out a little ahead, but I wouldn't recommend trying that), I've financed the rest of my education without debt as well.

Two years ago I came to Seattle and began an expensive graduate program, and since that time I have met a lot of students who have gone into debt to finance their undergraduate and graduate education. It's fair to say that some of them are happy with this choice, and there are certain professions (such as medicine) where it is very difficult to get an education without taking on serious debt.

However, it is also fair to say that I know a lot of people who have truly regretted taking on so much debt to go to school, especially if they enrolled in a program that does not lead to a high-paying job after graduation.

I'm simply not comfortable borrowing large sums of money. I was able to pay for my University of Washington Master's Degree on my own. But now that I'm writing during the day instead of building businesses, I really can't afford to continue paying for my education. Earlier this year I was accepted to a competitive Ph.D. program on the east coast, but the offer didn't come with financial support, so I had to make a tough decision.

I could have started the program by taking loans or using long-term savings, hoping that more financial support would come along later. To be honest, I briefly considered taking the loans. But in the end I made the right choice, at least for me: I'm not going. I don't value it that much.

#3 — A house is a liability, not an asset
I am currently living in one of the most expensive housing markets in North America (Seattle, Washington), and I have no interest in buying a home here. I am quite happy that my landlords are responsible for maintenance, and that I pay no homeowners' dues or property taxes. (Yes, I realize that some of those costs are factored in the price of rent, but I think we still come out ahead.)

In the long-term, you do have to live somewhere, and if you're staying put for the next 30 years and want a home of your own, ownership can make sense. But for many of the rest of us, renting is becoming less of a stigma now that people have begun to realize that taking out huge mortgages isn't usually a good idea.

Invest in yourself
My wife Jolie and I made a decision several years ago that guides most of our spending choices. We try not to spend money on “stuff” — physical items that all of us end up accumulating over time — and instead focus our spending on life experiences that we value.

Jolie is an artist, so we invest a lot in her art education and supplies. For me, world travel is my highest personal expense category. On a train ride from Hungary to the Czech Republic a few years back, I worked out the cost of visiting 100 countries. I had already been to a lot of countries, and I figured that to get to the remaining 60 or so and stay for a few days in each would cost roughly $30,000, or the cost of a large SUV.

I prefer to use public transport and don't own a car in Seattle, so I thought, wow, that's cheap. I could have a large vehicle and complain to everyone about the cost of fuel, or I could have the world. For me, it was an easy choice.

Some people would say that world travel is a frivolous luxury, and not something that should be such a prominent item in a graduate student's budget. I'll try to consider that point the next time I'm flying off to Hong Kong or Johannesburg.

Because travel is so important to me, my working budget includes funds for at least one Round-the-World trip each year. I realize that I don't need this trip in the same way that I need to buy groceries, but I do need it in the sense that it is one of my highest priorities, and I would rather eliminate other expenses before cutting into it.

A lot of GRS readers may not be as interested in travel as I am, but that's OK — it's more important to find your own “life experience” priorities. What do you get excited about? What are you truly passionate about? I believe these items should be your spending priorities, right after groceries, savings, and investing in others — the next area in this short guide to unconventional personal finance.

Invest in others
For many affluent people, charitable giving is an afterthought. It's something we do once in a while to feel better, or at the end of the year for a tax write-off.

I have a problem with that mindset. Done well, charitable giving is essentially an investment in those less fortunate than us. I don't view investing in others as a luxury or an afterthought; I consider it as essential as taking care of our own savings.

Money doesn't solve all the problems of the world, and it's important to give to the right causes. For example, because far more people give to short-term relief than to long-term development, the money spent on disaster relief is often highly inefficient and poorly used.

But when you create a strategy for your investment in others, you can have a positive impact on far more people, and the quality of that impact will be greatly optimized.

If you're not sure where to start and are looking for good causes to increase your own giving, consider the following organizations. I personally know the people who run each of these groups and give them my highest recommendations:

  • Kiva.org — This great organization has the objective of democratizing microlending by matching small donors (like you and me) with promising entrepreneurs in the developing world who need small loans to improve their businesses.
  • CharityIs — My friend Scott Harrison started this project to bypass government foreign aid (most of which does not go to the poorest people in poor countries) and directly provide access to clean water and sanitation throughout Africa and Asia.
  • Care — One of the larger, more traditional charities, Care has managed to keep administrative expenses down even as they have expanded to projects in 71 countries

What I'm Doing
Right now I'm beginning a writing career while my wife works as an artist, so we have definitely had to cut back on both giving and savings, but I still try to pay attention to the overall percentages. I also believe that if you don't “miss” the money you give — if there is no real sense of sacrifice — you're not really being challenged by the giving.

Therefore, I have a stated goal of investing at least 15% of our income every year in charitable giving. I feel a little strange about writing that here for 50,000 people to read, because this is something that is very personal, and I have previously shared the number with only a few people.

To those who say that it's hard to give to others when you don't have much money yourself, part of me wants to sympathize, but another part remembers that we chose to adopt this principle when we were living on about $12,000 a year. In the end, all I can say is that every year we have given more money away, and we have rarely lacked for anything.

To be continued…
By getting the basics under control, rejecting conventional beliefs about debt, choosing to spend freely on life experiences instead of “stuff,” and creating a giving plan to invest in others, I've built a personal finance system that is aligned with my values.

There are just a few important parts left, including where the income comes from. I'll discuss that in the next update, which will be published at Get Rich Slowly next week. In that article, I'll discuss alternative forms of work, the financial independence goal, and a few mistakes I've made on my nonconformist finance journey.

Thanks for reading this far! I welcome feedback, questions, or disagreements in the comments below.

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nbdean
nbdean
12 years ago

This is a great post. I really appreciate Chris’ “noncomformist” views on debt. And while I am not quite as conservative (I do have a mortgage), I think it’s great to see that general philosophy advertised. Even though I think that a mortgage makes sense for me, I still view debt, including my mortgage, in the same way. A note for those considering graduate school: If it is a professional degree (Medicine, Law, Business, etc) you’re after, it can be expensive and require loans. Academic degrees (History, Literature, Mathematics, etc), especially PhDs, often provide tuition wavers and a promise of… Read more »

Eric J. Nisall
Eric J. Nisall
12 years ago

There are some very good points made in this piece, some which I agree with and a couple I don’t. I absolutely believe in emergency funds 100%, writing my own piece on the subject earlier this month. I also agree that the only way to use credit cards properly is to pay them off in full each month, and if you can’t then you need to re-examine your spending/saving habits. I must disagree on 2 points, however. I think that you can live a cash-free life, and use credit for discretionary spending but it takes discipline and incorporates another of… Read more »

JerichoHill
JerichoHill
12 years ago

Chris, I remember my grandfather extolling to me the virtues of spending money on experiences, rather than stuff. Sure, the Mini Cooper (zing~!) is nice, but I’d rather talk about how I went to every single pro football stadium in the US with my buddies before we all had kids. That’s a memomry that not only sustains you, but one that sustains friendships. I think you’ve got a great point. Further, like yourself, I’ve financed my post-HS graduation. I recently had to decide whether to pay for the rest of my doctoral program or let the US government pay for… Read more »

plonkee
plonkee
12 years ago

JD, you’re right this post is great. I think that whether you can get the education that you need without debt is highly dependant on your circumstances and plans. Certainly, it should always be affordable. Having a mortgage ties you down a lot more than renting. However, regardless of which you choose, you still have to pay for accommodation on an ongoing basis. You can come out ahead after having made either choice if you do it successfully. That aside, the last two major points, about investing in yourself and investing in other people are fundamentally the most important things… Read more »

traineeinvestor
traineeinvestor
12 years ago

I have very mixed views on this post. There are some good points and some which I have to disagree with very strongly: 1. the difference between good debt and bad debt is very real. The use of leverage with investments has enabled many people to achieve their financial and lifestyle goals. It is certainly working for me and does not leave me feeling either tied down or worried at all. In fact the use of debt has been a very positive experience in another respect as well: increasing my confidence 2. a home is an asset. I have yet… Read more »

Chris Guillebeau
Chris Guillebeau
12 years ago

Hey everyone, thanks for checking out my essay! I appreciate the chance to share and look forward to hearing your thoughts.

Michele
Michele
12 years ago

One point that stands out to me: charitable giving as only money. For many organizations, your time and resources can be even more valuable to the cause.

I do animal rescue transport, and writing a check won’t get a dog out of a kill shelter the day before he’s scheduled for euthanization.

However, this post is definitely good food for thought.

B Smith @ Wealth and Wisdom
B Smith @ Wealth and Wisdom
12 years ago

Love the post. Based on what I read today I’ll be buying this book. I especially like several points that I think most PF experts have wrong: -Good debt: he is absolutely right. All debt is a burden. Sometimes it is worth the risk and the cost. Note I say sometimes, not often! -Your house: This is not an asset people. An asset generates income. Your house pulls money from your checking account. Should you own a house? Maybe. Just make a decision based on facts, not what some guru says. -Student loans: There is no need to take out… Read more »

Shanel Yang
Shanel Yang
12 years ago

I’m one of those folks who financed 100% of their post-college education with student loans. And, woah, did I ever live to regret it! It took me 10 years to pay it all off — and that was quick compared to most of my friends. I think I was only able to do it because I didn’t buy a home right away or start a family. And, what I did buy was a very small condo, and I took on a roommate to help defer the costs.

Chris, great post! Anxiously awaiting Part 2!

Jessica
Jessica
12 years ago

Well, this dude obviously doesnt have kids, but that aside, I like the cut of his jib. I like that he leads this “non conformist” lifestyle but still provides for himself without mooching off others and he still contributes to society. So many people who claim to have his same values are just bums looking for a free ride. As a single mother, most of his ideas don’t work for me, but good for him for making this work for him without becoming a burden for others. I’m eager to read more.

Sam
Sam
12 years ago

I have only one major problem with this excellent story: maintaining the kind of nihilistic attitude about Social Security that Chris exhibits is neither warranted, nor wise. Social Security is working fine and will go on functioning well into the near future, unless it’s allowed to be privatized. This is why we need to care enough about it to fight any such scheme tooth and nail, because the whole point of it would be to take money out of our collective pockets and line the pockets of the already-wealthy. Here’s the scoop. This article was written a few years back,… Read more »

D Albert
D Albert
12 years ago

Respectfully disagree in some areas: I am currently 100k in debt with student loans at 3.6% interest. Really not worried about it. I’ll pay 400 dollars a month for 20 years – but it was worth it to join my profession. My loan payments are tax deductable and I save at least 3X this amount a month which goes right into my 3% high interest online savings account (in addition to Roth IRA) – meaning in 5 years or so my debt (72k) will accumulate at the same rate as my savings (72k). I could pay it all off at… Read more »

Chad @ Sentient Money
Chad @ Sentient Money
12 years ago

My least favorite part: long-term index fund investing. In 20 years you will wonder what happened to the promise of a big retirement fund, as indexing won’t even pull the theoretical 7%..

John
John
12 years ago

I think the author misinterprets the meaning of the term “good debt”. While good debt is a lot harder to come by than bad debt, good debt is defined as when you owe money on something that you are using to produce more income per payment cycle than it costs you to borrow the money. Much like working out by doing push ups and sit ups, you can get in good shape, but if you work out with weights you’ll get in shape faster. By using good debt, you are leveraging your position, increasing the speed in which you gain… Read more »

J. David Fox
J. David Fox
12 years ago

Chris, this is a great article, and I’m really looking forward to the second part. I downloaded your Manifesto yesterday, hoping to read it this weekend. And J.D., this is a great site; just started subscribing about a week ago, and it’s been excellent. Keep up the good work guys!

tom Feldsten
tom Feldsten
12 years ago

This is one of the best-written, most thought provoking pieces I’ve read on GRS. The author’s decision to forego a PhD because of the debt he would have to incur was particularly poignant to me, as I am enrolled in a grad program that I am taking on debt for. Perhaps I will cut my school load to one class a term in order to pay as I go . . .

Very, very interesting stuff.

KC
KC
12 years ago

I’ve never thought a home was the “investment” everyone says it is. First of all there is the cost – which takes a lot of money for a down payment and monthly mortgage payment. Then there are the repairs. I spend about 2% of my home’s value, on average, each year having stuff fixed. Some years I spend 0.5%, other years I spend 3.5%, but it always seems to average about 2%. And I spend a lot of time maintaining the home. Someone has to clean it, someone has to do yard work and its me cause I don’t want… Read more »

Kristen
Kristen
12 years ago

What a great post. Chris and his wife obviously have figured out what’s most important to THEM, and designed their financial lives in a way that makes sense. Various happiness authors, who study ‘positive psychology’, all advocate less ‘things’ and more experiences. This is right in line with that idea. I would like to point out, however, that Seattle has a phenomenal public transit system. Most of us aren’t that lucky. Of course, our real estate prices are a bit lower, too. Best wishes, Chris, on hitting every country by 35. Wow!

Brack
Brack
12 years ago

@ Chris – an excellent post! You’ve gained a new reader!

@ JD – the guest posts on this site continue to give excellent, solid information and advice… Props for extending the quality content of your site… its a joy to read and a good reminder as I continue my own journey of finally making it to a debt-free lifestyle…

deepali
deepali
12 years ago

Great post, though I am confused on one point. The author said it would cost 30K to visit 60 countries, spending a few days in each. I miss the point in that? For me, traveling isn’t about being able to say I’ve been to X number of countries, but about being to get outside myself and experience something different. You aren’t getting much in a different country every few days. In that case, I’d rather the SUV (in theory, I don’t own a car). At least I could get some use out of it. As for the rest, thumbs up.… Read more »

Eric J. Nisall
Eric J. Nisall
12 years ago

I don’t want to sound condescending or confrontational, but B Smith has it completely wrong. An asset is not something that generates income–although some assets MAY be a source of income– rather an asset is a probable future economic benefit. What that means is something that down the road will more likely than not provide economic benefit. In the case of a house, that may involve eventually renting it out or outright selling of the property. Just like a share of stock, a house is classified as an asset regardless of the chance that it may decrease in value. Is… Read more »

Kevin
Kevin
12 years ago

“charitable giving is essentially an investment in those less fortunate than us.” Wow. So a home is a liability, but giving money away is an “investment.” Riiiiight. Of course it’s always fascinating to read about someone who is living entirely in the here-and-now. It goes without saying that their lives are more interesting than ours, because they’re spending freely with little thought for the future. In this entire article, which even J.D. characterized as “long,” all he said about retirement planning is that he believes in low-cost index funds, and don’t count on Social Security. On the plus side, I… Read more »

Beth@paydaytree
12 years ago

WONDERFUL. I loved this post and I think I might be rethinking my own budgeting based on the basic points that were mentioned.

I haven’t had the opportunity to spend much time out of the country, but I treasure the time that I have. I had never stopped to consider that buying that new pair of jeans or that one DVD is taking away money that could be spent on a trip to Fiji or somewhere equally exotic.

Dany
Dany
12 years ago

I agree with most of this article. I believe you should follow your dreams (in this case, travel) and FIND a way to pursue them. As for home debt, we are entering a mortgage now with the plan to pay it off in 10-15 years. That will mean some sacrifices, but in the end, we’re hoping it will be good for our “retirement” in that we only have to worry about upkeep and property taxes, but we’ll know we have a place to live throughout our lives. Any good plan can go bad, but that’s ours. I’d hate to think… Read more »

Peter
Peter
12 years ago

Chris I just want to encourage you in your goal of giving 15% of your income to charity. It might seem crazy to some people but I made the same goal a few years ago and I couldn’t tell you enough the blessing that has been in my life. It has taken my personal focus off of me and put it on other people and I have grown because of it. I still aspire to do bigger and greater things but now that’s just so I can make more of a difference in other people’s lives. I would encourage everyone… Read more »

Jesse
Jesse
12 years ago

I love the “invest in yourself” and “invest in others” sections. Investing in others not only leads to a very high level of satisfaction, but also is a form of leverage, where you can take what you do well and expand it to reach more people.

The trick with any “investing” is that it takes time and our “quick hit” mentality doesn’t accommodate it too well. Thanks for the post Chris!

musicman
musicman
12 years ago

I have to say JD that I am continually challenged and encouraged by this blog and its contributers in my quest for financial freedom. This post is great – I appreciate the frank discussion on giving. I also believe that if you’re not “giving till it hurts”, you’re not giving enough. One of my stated goals for this year is to increase our family giving in both money and time. Just wanted to say thanks for what you do and to let you know that it’s reaching at least one average joe on the road to financial security in a… Read more »

Erica Douglass
Erica Douglass
12 years ago

Well said. Definitely one of the best PF articles I’ve read recently.

-Erica

deepali
deepali
12 years ago

@ Kevin – Interesting counterargument. I suspect the author has a different take on “retirement” than you do, and thus has a different direction he’s going (financially). But I’m curious why you “just have no patience for listening to people who insist on repeatedly telling me how ‘different’ they are”. I don’t know about other people you’ve had to endure, but this was just one guest post on one blog…. your reaction seems quite out of proportion, IMHO.

TosaJen
TosaJen
12 years ago

It’s always interesting to read something from the fringes. We consider ourselves and our uses and thoughts about money unconventional for our peer group, level of affluence, and local culture, in many of the same ways the writer does. However, DH is turning 47 next week and we have young kids to raise, and don’t want to have to start from scratch ever again, so we’re a bit more cautious than our “under 35” author. But I find it interesting to compare/contrast with the choices other people make, especially when they share their values and reasoning. Sometimes we make changes… Read more »

Cathy
Cathy
12 years ago

I agree with the author 100%. A mortgage is debt, and for as long as you carry the debt, it is a liability. A house is a place to live and shelter. You can add roses to it to make your living space more enjoyable/comfortable, but it is not an investment. David Bach’s line of ‘homeownership makes you a millionaire’ mentality is exactly what got us into this mess with falling dollar and high inflation. I think my depression/World War II era grandmother had the best advice. When she bought her house, it was a place to raise her family,… Read more »

The Happy Rock
The Happy Rock
12 years ago

I don’t have much to say other than great post, great life, and great thoughts on giving! I thoroughly enjoyed it.

Kevin
Kevin
12 years ago

@deepali: Maybe I’ve just spent too much time around people who are too full of themselves. Maybe I was reading too much into Chris’ writing. I just found myself rolling my eyes when he wrote things like “I’ve managed to choose unusual paths,” and “as different as I may be.” He also wrote, “Sadly, the majority of North Americans are woefully under-informed about financial matters and do not set savings goals.” Which is true. But then rather than go on to discuss his own (undoubtably unique and non-conformist) outlook on “savings goals,” he instead prattles on about how awesome his… Read more »

rubin pham
rubin pham
12 years ago

although i own a home in california, i do admire the goals you set for yourself.
good luck with your future.

Mike
Mike
12 years ago

Always with the donations, these articles. Set the white liberal guilt aside, people. By a rational analysis, donating money ranks equal to or beneath indulgence spending. The money is gone and you don’t get anything out of it except perhaps a warm fuzzy feeling. If you refuse to buy into the guilt trip of modern media and religion, you can live without the pain or fear or guilt – and put that money into savings or debt-retirement where it will do you somelong-term good. Make decisions with your logic, not with your emotions. I donate zero dollars per any unit… Read more »

MonkeyMonk
MonkeyMonk
12 years ago

I think there’s also of great notions expressed in this guest post.

But call me a cynic — I’d be very surprised if Chris doesn’t have a trust fund somewhere in his past, present, or future. I just felt like there was a tone to his story that made me suspect that he’d have something to fall back on if his experiment in free living didn’t work out as he exactly planned. I run into a lot of people similar to this in my travels.

Chris Guillebeau
Chris Guillebeau
12 years ago

Hey everyone, I’m glad that my writing has inspired some strong opinions. Remember that there is a part two coming later, where I’ll share more about self-employment as well as a few mistakes I’ve made.

I am getting ready to head out on an international trip, so I probably can’t respond to all comments here. However, please continue to share your feedback, positive or otherwise.

As to the trust fund, no, I don’t have anything like that.

Take care and thanks for reading!

Chris

Dave
Dave
12 years ago

I liked the post ok. But . . .

I think most people get a lot of joy out of owning their homes, or at least the ones I know do. Maybe because of where I live.

Also, if public transportation was an option where we live and work, we wouldn’t have a car either and could afford to travel and do cool stuff. (Matter of fact, we saved money by buying a house because apartments were all too far away from work. Just not many out here in the ex-urbs.)

The Math Guy
The Math Guy
12 years ago

Although there are some benefits to the article, I totally disagree with #1, #2, and #3. In fact, it is downright dangerous to suggest that those are mistakes people make. Mathematically speaking, student loans and mortgages give one financial leverage: access to funds they turn around and invest in something that over a medium to long term timeframe yields a net return (after paying back the borrowed funds). Why, for instance, pay for an education out of pocket, when you could instead borrow the funds, not accrue interest while in school, and take the money you would’ve used to pay… Read more »

Cathy
Cathy
12 years ago

Actually, I think the people who don’t donate are the ones with the guilt and rationalize why they don’t donate. Those who donate out of altruism never think of it in terms of ‘value’ and what they are getting out of it. Donating for ‘the warm fuzzy feeling’ is not an altruism – it also is a form of selfish motivation. I’ve donated to all kinds of charities, and I have no idea if any good came out of it. I hope so. I never got a tax deduction or anything tangible out of it. Never regretted a dime. If… Read more »

Katharine
Katharine
12 years ago

I think this article is great! Traveling is one of my favorite things to do, and I’ve taken on debt to do it (for a study abroad). I haven’t come to regret that decision yet, but I also haven’t gone into repayment yet. Hopefully I can travel as often as you do when I’ve graduated.

Nancy
Nancy
12 years ago

There are benefits to home ownership that are not tied to whether or not it is a good financial investment. My husband and I are in our 40s and have two young boys. We like the freedom to live in our home as we please as homeowners. We don’t have to worry about our boys being rough on the house for fear of landlords, we can do what we want with our backyard, we can have as many pets as we want, etc. etc. without asking some landlord’s permission, we can remodel, we can have our home be just what… Read more »

Ethel
Ethel
12 years ago

Thanks for the motivation to give – I really want to do this. I think you are very right about finding priorities to invest in – and starting by figuring out your passions. We realized that we have the ordinary but important passion of family – and the uncommon option of building our family’s foundations quickly (10 years) and having me work part-time starting at age 35 – an entire family living off of twenty hours per week of work. This is only possible because (a) I have a high income (thank you, student debt! LOL), and (b) because we… Read more »

tom Feldsten
tom Feldsten
12 years ago

To The “Math” Guy –

That’s scary – you are suggesting that we borrow money for education and rather than use it for education we put it somewhere to earn 12% ( “… take the money you would’ve used to pay the tuition . . .”). What a lark! You tell me exactly where I can be guaranteed 12%, and I just might think about it. Otherwise, get real. Your title is clearly erroneous, and your sophomoric answers are poorly offered.

Eric J. Nisall
Eric J. Nisall
12 years ago

Cathy–I’m just curious as to why you do not know if any good came of your donations. I only ask becasue of all of the allegations regarding “charitable companies” that take most of the donations and funnel it to the board of directors rather than putting to the indended/advertised use. Personally, I don’t judge people based upon the way they deal with their money (ie:donating or not & how much), unless of course they are clients, or specifically ask my opinion. I have to admit that the responses regarding home ownership were particularly interesing have prompted me to write a… Read more »

nbdean
nbdean
12 years ago

From one mathematician to another:

I know of many people who, thinking that there is no downside to borrowing money as long as it’s for the “right” reasons, overspend on houses or on their lifestyle while a student. Viewing every dollar of debt skeptically helps to ensure that what debts you do accrue, even for good reasons, are kept to a minimum.

The advice in the post goes over the top for my taste as well, but too much similar advice errs on the wrong side of caution, so I think it’s refreshing and beneficial to get an opposing viewpoint.

Froggy  Al
Froggy Al
12 years ago

Inspiring post, thanks Chris. Will you address the issue of healthcare coverage as an independent worker, as well as retirement planning? As the saying goes “Charity begins at home”, and you can’t take care of others if you are in poor shape (financially & physically), either today or decades from now.

Odd Lot
Odd Lot
12 years ago

Hey Chris,
Interesting post. I bet your home-buying advice resonates with a lot more people than it would have a year ago, we’re facing a pretty brutal market in the US.

With all that travel I bet you get to talk about money and investing with people all over the world. It’s a popular subject everywhere that I’ve visited and an easy ice breaker. If you ever have a follow-up it would be interesting to hear the differences between the American take on frugality and personal finance vs foreign countries.

Cheers,
Odd Lot
http://www.Money-and-Investing.com

Cathy
Cathy
12 years ago

Eric: Abuse of charity money certainly is a grave concern. Donations do not have to be monetary, though. I’ve donated old clothes and household items to Goodwill, who sell their items at a significant discount to lower income families. I donate blood, and because I’m O , almost anyone who needs a transfusion can use it. My boyfriend has donated his limited spare time to food banks. There is all volunteer shop around the corner where I live who work for an organization that pays fair wages for goods made in 3rd world countries to keep kids out of Walmart-type… Read more »

Rich
Rich
12 years ago

#2 – Student loans? No thanks! Why not? If you have cash to pay for it anyways, why not at least make 3-4% in a CD while you have 0% interest on the loan? The student loans we got my wife don’t charge interest till 6 months after she graduates. We put $6000 into a one year CD at 3% APY. That’s $180 for the price of filling out a loan application. If I’d been smarter when I was in school I would’ve done the same thing with my own tuition money. — We do a similar thing with our… Read more »

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