The Dark Side of Frugality

This story starts back in November 2013.  We were still only about a year removed from college, and were working our way through the beginning phases of striking out on our own financially.  At the time we had a hefty AT&T bill coming every month, and knew that in order to more efficiently pay off our new place (we had moved in a few months prior), it would be a good idea to find a way to trim that expense.

We wanted the mortgage gone, ASAP.  Although we knew switching cell phone plans wouldn’t be a monumental shift in our budget, it would matter, and ultimately save us a lot of money as the months rolled by.  Around the same time, I had already been exposed to the personal finance scene online but had just gotten around to discovering Mr. Money Mustache.  His review of Republic Wireless and their offerings really opened my eyes to the other types of phone services that are out there.  It was amazing to me that this was so unknown to the general public.

As I write this is the spring of 2016, rate competition in the cell phone business has definitely gotten fiercer than where it was in 2013.  Now, you’ve got the big boys (AT&T, T-Mobile, Sprint) competing heavily for customers, sometimes offering to cut their competitor’s rates in half for signing up with them (Verizon is still the pricier big company the last time I checked – I guess they get away with it because they tend to have a reputation as a higher quality network).

However, this was not so in 2013.  It was quite common for your average Joe to be paying $100+ per month for their cell phone usage (text, talk, and a decent amount of data).  You can imagine my delight when I discovered that, with two Republic Wireless phones, Mrs. Mase and I could pay under $50 for unlimited service!

After a little more research, we took the bait and signed up for Republic Wireless, ending up with two of their Motorola Defy XTs.  Sadly, they went out of production not long after that (early 2014 I think). They’re not the best looking phones but they get the job done.  But man, compared to today’s standards, they are kind of dorky looking phones.  See for yourself:



Even when we got the phones delivered, they were pretty much ending production runs.  At the time however, it was the only phone that Republic Wireless offered, and it was pretty inexpensive, so we went with it.

So here we are, almost two and a half years later and we’re still rocking these bad boys.  They suffered some drops, been exposed to a lot of dirt, and surf the internet with 3G speed but hey, that’s better than the phones we had before the switch.

The charging connectors even broke on both of our phones – first on hers and then mine.  At first to compensate I would just charge up a battery via my phone and then stick it in her phone, then charge up a battery for myself.

This worked pretty well for a while – until my charging connector broke too.  Despite my best efforts, I could not get either of our phones to charge at all.  So, we now have four batteries in total that we charge using an external charging device, and we swap out the batteries routinely.

That’s a lot of hassle for some people, and understandably so.  Let’s look at the cost savings though.  If we had kept going with AT&T, our costs would have been at least:

29 months * $100/month = $2900 spent on cell phones

This is a conservative scenario, assuming no rate increases, etc.  Here’s how much we’ve spent in total over the past 29 months (about $20 included because of the extra phone batteries and charger we bought):


That is a difference of $1784.01.  That is statistically significant.  That is more than some people’s mortgage payments.  Is it an absolutely huge win?  No, but it’s a win nonetheless.  If that money were stuck in a good investment and left alone for 40 years (and we actually are going to be investing that savings, now that the mortgage is paid off), it would be worth $80,743.27 with a long term 10% rate of return.

And, the longer we continue to use these phones, the greater our savings are.  We actually planned to upgrade the phones when the mortgage got paid off, but we kind of looked at each other and said, “Eh, these are still working.  We’ll get new ones later.”

“Ok you guys saved some money.  So…what’s the bad part of this story?”

Let me explain.

Several months ago Mrs. Mase and I met a cool couple, not very different than us, in our various social interactions around our city.  We hung out a few times and really hit it off, and before long we considered them squarely in the “friend zone.”

As time went by we started learning more and more about each other, and they were even nearing the point of being in our inner circle of friends.  Now you see, these friends were similar to us in many ways (hence why we tended to gravitate toward each other in the first place), but spending was not one of them.  It became clear we had a very different set of priorities when it came to where to allocate our money.

When they learned that neither the Mrs. or I are on Facebook, the guy friend thought it was intriguing. When they learned that we bought our condo for super cheap, he was impressed by our savviness.  When they found out we have super simple phones that don’t accept picture messages, he laughed a little and poked a bit of fun.  Knowing that I am an engineer, and knowing that engineers are commonly known as making above minimum wage, and knowing my wife also has a solid job as well, it was strange to him that we wouldn’t just pony up and get a more up to date phone.  Ok, fine.  I can see how that’d be strange from most people’s point of view.

The problem with being in the “friend zone” phase and not the “inner circle” phase of friendship is that it is often unwise to disclose your more deep desires, dreams, and philosophies.  This could risk the friendship, as it is in a more fragile state.  Envy, judgment, or misinterpretations could easily follow without much hope for reparation, and without considerable communication between both parties.

There is no way we were going to reveal to these guys that the real reason we have such cheap phones is so that there would be that much more money available to throw at our mortgage so we could be debt free in a radically short period of time.  And, even if we didn’t have such a radical goal, low levels of consumption in and of itself can be a virtue, as can be simply wanting to avoid the constant distractions (read: endless notifications, apps, and social media) that newer technology would provide.  So, in response to this small joke, Mrs. Mase and I just laughed it off with him and continued our evening of fun and socializing.

We kept hanging out and some time later, the guy friend brought up our phones again, poking fun at it. Again, not really taking it to heart, we didn’t respond with much else other than a chuckle and a remark how we kind of liked our phones and that we considered them satisfactory.

The other night we were chilling, having a good time out in the city.  It was getting late and time to head home.  When Mrs. Mase went to pull out her phone and call an Uber for the four of us, the guy friend, out of nowhere, started laughing at us for still carrying around these dorky phones and not upgrading.  I let out a sigh of disappointment because this guy just couldn’t drop it, or at least come at the situation in a more approachable way.  He could have said, “Hey, I noticed you guys still use those phones, is there a reason you don’t upgrade?”

I’m sorry, but when someone repeatedly makes a joke about your choices that you repeatedly don’t really find funny, it becomes an annoyance.  At a certain point it becomes disrespectful because someone else is repeatedly being critical of you, and that can only be tolerated for so long.

Before I had the chance to even breathe in again after my sigh of disappointment, Mrs. Mase responded calmly but firmly, “Please, I’d appreciate if you didn’t place your societal expectations on me.  Thank you.”

That really got our guy friend going, and he went on about how we couldn’t take a joke.  To exacerbate the problem, he refused to inquire about our spending patterns in this area of life in any sort of inquisitive, humble way.  He didn’t inquire at all.  He simply continued to declare that we had out of date phones that were behind the times, and it clearly made him upset.  In fact, he actually said, “Yeah, I’m calling out all my friends right now that don’t have iPhones.  If you don’t have an iPhone by now…”

The female friend didn’t say anything, but Mrs. Mase and I tried to talk some sense into this guy and get him off of our backs over something that would otherwise be so silly to argue about.  He didn’t take it well though.  To him, we were just two cheap people who couldn’t take a joke and who didn’t want to bask in the sun rays of American consumerism.

Ultimately, he was disturbed by our unwillingness to pay for something flashy that we clearly could have afforded.

Frustrated with the conversation, he ended up leaving the three of us standing where we were, and walked off.  He ended up missing the Uber that we had called…..from my wife’s phone.  Oh well.

Alas, there is a dark side to frugality.  Neither Mrs. Mase and I have spoken with these friends since (I half expected an apology text the next day, but I guess pride is a powerful thing).  It is unlikely that we will ever be friends again.  Even if we do repair the friendship, there are some fundamentally different beliefs between us that, in spite of all of our other shared interests and similarities, will stagnate our relationship.

It truly is a shame, but it goes to show that sometimes, people just won’t get you.  They won’t get your goals, dreams, or aspirations.  And many times, they won’t even care enough to try to find out, or to honestly know the reasons behind them.

Take a look at the comments on personal finance articles in the mainstream media sometime.  When a big media outlet posts something about a couple who became millionaires by 40 or something like that you will have: a small percentage of people who think its awesome and will happily applaud, a larger percentage of people who think its cool and have some honest questions or concerns, and then a majority who scream about how “it’s not possible” or “they must have inherited their money” or some other unsubstantiated nonsense.

People believe what they want to believe, and they feel how they want to feel.  In our case, I’m glad we didn’t tell them that we had just paid off our mortgage and that switching cell phones was one of the small reasons we were able to do it so fast.  They might have feigned encouragement and admiration, but there would have been some criticism as a follow-up.

When you’re working toward financial independence and trying to live a more awesome life in general, you don’t need people pulling you down.  Being truly curious about another person’s lifestyle is one thing, but criticizing while making lots of assumptions is another.

Thoughts on Greed

Greed is a constant topic of interest in our culture today.  It is often talked about, and the word is thrown around often to describe people who “have too much”, whether it is material possessions, social status, or some other form of capital.  When people discuss greed it is never to talk about themselves, but always to pass judgement on someone else.

When is the last time you heard someone say, “Yeah, I’ve been a little greedy this week”?  Never, right?  Simply by discussing greed, we always place it in the context of making a distinction between the way we are and the way someone else is.  In the a U.S. American context, there is a lot of discussion right now in political circles about the greed of “those 1%’ers”.  In particular, this is coming from the Bernie Sanders side of the political camp, where he wants to “soak the rich”.  I won’t go into economic policy of various politic candidates right here (that’s already being discussed enough, isn’t it?), but I do want to talk about greed and the relative/absolute measures we use for it.

Most often, people discuss greed in relative terms.  This can be said saying things like, “No one should ever make that much money” or “That’s just too nice of a car, she should have given it to charity.”  These kind of statements imply that, as a culture, we should accept a cap, or some sort of maximum on how well someone is doing financially, relative to other people in the population.

Let’s use some examples from history to paint a picture of how material wealth and standards of living has changed over time.  First, take the wealth of John D. Rockefeller, arguably one of the wealthiest people in history.  In today’s dollars, he would be worth well over $330 billion (according to Forbes).  That, to me, is almost unimaginable.  That is a level of wealth that many would consider absolutely obscene.

Source: Wikimedia.

Source: Wikimedia.

Yet, if Rockefeller Sr. were alive today and carried about living the same lifestyle that he did in the late 1800’s/early 1900’s, it would be markedly different than that which you and I live.  Yes, he would have the amazing estate, servants on call, and the finest choice of food.  However, he would not have the ability to entertain himself for merely a few dollars a month with a large, rectangular object in his living room.  He wouldn’t have the ability to communicate with others live via a screen on a smaller rectangle in his pocket.

The ability to walk into a store and choose from the widest variety of fruits, meats, and spices is something he never would experience.  Nor would he have had the pleasure of flying in a large aircraft with beverage service across the country in just a few hours.

All of these things are parts of the modern lifestyle of your typical American in 2016.  None of these things would have been available as part of the lifestyle of the richest man in the world in the 1800’s.

Relatively speaking, in many ways we are richer than Rockefeller.  I don’t mean to make light of his wealth – of course it would be awesome to have a multiple golf courses built at various estates, and be able to fund the next University of Chicago.  But the level of luxury available at the time was simply not what it was then as it is today.  The power of technology, human organization, and innovation has led to rock bottom prices of luxuries to the masses.  Many times we take this for granted.

This is just one example, but I think it is a fair one that helps demonstrate that simply living a middle class life in the United States is far more luxurious than being one of the wealthiest people in the world a century or so ago.  So does being a 1%-er in the United States in 2016 make one a greedy person?  Absolutely not.  In fact, if wealth is to be examined on a global basis, you’re already a 24%-er if you have over $10,000 in net worth:

Global Wealth 2

That is alone is the value of what most people’s cars are worth.

So, even if greed was a measure of relativity of resources, simply expanding the scope beyond the American context shows that, from the perspective of the average global citizen, the average American is well above the median financially.  Should the fact that I own an older Toyota put me into the greedy category though?  To my friends and neighbors, the likely answer would be of course not.  To someone living in rural China, or in Zimbabwe?  Maybe so.

The problem with this mindset however is that at the core, greed is not about the relative amounts of resources that a group of people do or do not have.  It is about the attitude that one has about their resources.

I would contend that you can have a person with relatively few resources, someone in the lowest decile of income or wealth for their demographic, and consider them a greedy person.  You can also have a person at the highest levels of wealth and consider them generous.  The opposite of both cases is also true.  What is the percentage of their capital (financial and otherwise) that they give to others?  How do they feel and internalize that giving?

I’d also say that it would be naive if I did not discuss the added temptation that being wealthy has to resist giving and generosity (and thus, combating greed).  For example, Mrs. Mase and I have never been at a better place financially than we are right now.  Although we’ve made a conscious effort to give more to others in different ways, simply having more can sometimes offer a temptation to simply increase our own consumption.

Greed is all about attitude – whether you have a lot of money or you don’t.  It doesn’t matter where you are on the income or wealth scale, relative to your neighbors down the street or relative to your neighbors across the ocean.  It is the way we feel about money that changes how we behave with it, which in turn influences whether or not other people see us as greedy.

The Role of Outliers in Self-Motivation

When we are young, we often aspire to be like someone older than us, someone we deeply admire for one reason or another.  Perhaps this is a family member, a cultural icon, or a teacher.  In any case, where that person falls on the bell curve of whatever attribute you want to emulate plays a large role in where you set your personal aspirations, and thus how deep your self motivation can become to be like that person.  Are they an outlier or just one of the crowd?

The reason I bring this up is because I was thinking of the role of outliers in discussions of personal choice vs environmental factors, you know, nature vs nurture type stuff.  I was having a dialogue with a few other readers on Joshua Kennon’s blog about the nature of free will and the nature of the environment one is born into, and how either of those factors does or does not influence the financial outcomes of somebody’s life.  I was trying to make the case that free will and making personal choices over a period of time has a significant impact on these outcomes, but I hadn’t really thought things through, and, as a result, ended up coming across with poor communication.

You see, I referenced Charlie Munger, the legendary investor and businessman, as someone who made personal choices in his life to become financially independent and eventually rich.  He effectively had to start his life over at 35 years old and build everything from scratch – his family relationships as well as his finances.

The problem with using an example like him is, well, he’s a billionaire.  That automatically makes him an outlier in modern society.  He is, by all accounts, an incredibly intelligent, wise, and determined individual.  I look up to him.  He is a role model for me.  Even though it wasn’t appropriate in the discussion, I brought him up b/c I want to be like him in many ways.

It got me thinking that, in many ways, the people we strive to become is influenced by the accomplishments of those we admire.  Charlie Munger is a wealthy man who appreciates the many nuances of human existence, has a family, and designed a community of luxury homes in California for the fun of it.  That sounds like a cool guy, a guy whom I would like to emulate in many ways.


This is one of the homes designed by Charlie Munger in Montecito, California.

His accomplishments are far above my own, and pretty much far above anyone that I know personally. I think that this delta between the man that I am and the man that he is (at least in terms of financial acumen and overall life skills) leads me to have a stronger motivation to increase my skills as an investor than I would otherwise.

If I was very admiring of my next door neighbor who drove nice cars and wore suits to work, I would likely try to emulate his or her behavior, which is not so uncommon.  Lots of people dress nicely and buy fancy new cars.  The delta between who I currently am (as in, the way that I behave) and who they are is not that much, so my internal motivation would not be that strong to be like them.

I think that is why we naturally gravitate toward heroes in our society.  Their accomplishments are so great, their life seemingly so awesome, that we cannot help but be in awe of how cool it would be to be like them.  Whether it’s basketball players, rap stars, or legendary investors, in some way we all want to be like our heroes.  I would imagine that there is a connection as well between these outliers – those who truly become successful – and the types of heroes that they emulate.  Because “accomplishments” are highly subjective, we all gravitate toward different people, and thus aspire to different life results.

If you want to increase your motivation to become better in a particular field, vigorously study the absolutely most amazing people within that field.  What have they done that is so noteworthy?  What was their path?  Did they come from a situation or environment that you came from?

The more that those questions can be answered, the more you will find, I think, that the burning desire to achieve more and grow blossoms within you.  It certainly has with me as I have continued to study those who have become financially independent.