"I had little anxiety about buying things because I simply couldn’t afford anything."
May 16, 2012 11:53 AM   Subscribe

"A Harvard MBA Pays Down $101K Of Debt." Two years after he graduated from Harvard with an MBA, Joe Mihalic, now manager of strategic alliances and business development at Dell, vowed to do “everything in my power–short of lying, cheating, and stealing–to pay down" his student loan debt, (then totaling 90K,) "in the next ten months.” After applying for a weekend delivery job, he also decided to chronicle the steps he was taking on a blog: "No More Harvard Debt." First page of posts is here. Penultimate post explains his process: "Mission Accomplished."

From the "Mission Accomplished" post:
"...there were definitely some contextual factors at play here. My income was higher than the average household income of $50k and I lived in a city that has a relatively low cost of living. I was also single and childless, so the lifestyle changes I made were generally victimless."
posted by zarq (189 comments total) 28 users marked this as a favorite
 
Ummm...okayyyy...
Privilege has its advantages, I guess.
posted by Thorzdad at 11:56 AM on May 16, 2012 [39 favorites]


This medical student remembers when he was only $101k in debt.
posted by The White Hat at 11:59 AM on May 16, 2012 [6 favorites]


Reading over his account, it's an interesting study in how someone with a high income can still overspend, and how dramatic the turnaround can be when they decide to stop overspending. To wit:

"I had a mortgage on my house and two cars and a motorcycle, and I had become accustomed to spending $1,300 per month on entertainment.... Other than maintaining a six-month Screw You Fund, contributing 10% of my paycheck to my 401k, and making sure I could pay off my monthly credit card balance, I wasn’t thinking much about my financial future..."

His 'not doing much at all' point is a lot better than most Americans can manage when they scrimp. It's not intended to undermine his post, but... yeah.
posted by verb at 11:59 AM on May 16, 2012 [16 favorites]


He should try playing on one of the higher difficulty settings.
posted by monju_bosatsu at 12:01 PM on May 16, 2012 [268 favorites]


A Harvard MBA is better at managing his personal finances than the average schmo? Shocking!
posted by gyc at 12:01 PM on May 16, 2012 [17 favorites]


At my downwardly mobile pace of the last 4 years, I could pay off 101k in debt - if I really worked at it - in about 101 thousand years.
posted by Benny Andajetz at 12:05 PM on May 16, 2012 [7 favorites]


Privilege has its advantages, I guess.


This privilege talk is getting really really old.

There are many students (socially, financially) like this guy who will find his blog to be an inspirational and practical guide to become debt free. But no, unless you're 99%/working class/poor/starving/dead you are privileged and an obvious target for snark.
posted by Foci for Analysis at 12:05 PM on May 16, 2012 [46 favorites]


$1,300 per month on entertainment

And there's 1/6th of his solution already. Reduce the 10% 401k to 5% for a year and sell a car and you are done.

Why did he need a blog, let alone an MBA from Harvard, to do this?
posted by DU at 12:06 PM on May 16, 2012 [9 favorites]


verb: " His 'not doing much at all' point is a lot better than most Americans can manage when they scrimp. It's not intended to undermine his post, but... yeah."

Yeah. I was fascinated by this article and his blog for a lot of reasons, but the biggest had to be that the way he cut down was to stop living outside of most people's means. Also worth noting that the interest rates on the loans he was paying off (and freaking out over) ranged from 3.13 - 7.90% Which is really, really low compared to the interest most people are carrying on their debt loads.
posted by zarq at 12:07 PM on May 16, 2012 [4 favorites]


I stopped contributing to my 401k, I didn’t go home for Christmas, and I missed my friends’ bachelor parties and weddings.

While getting rid of his debt is a great accomplishment, I have to say that it seems like in his haste, he lost out on more than just the student debt.
posted by jetlagaddict at 12:07 PM on May 16, 2012 [11 favorites]


A Harvard MBA is better at managing his personal finances than the average schmo? Shocking!

The average schmo doesn't make six figures while having almost no unavoidable expenses. As he says in the post, this is not rocket science, it's obviously possible for someone with a huge income to live like they only make minimum wage and pocket/invest/pay down their debt with the rest. The fact that so many people spend almost everything they make no matter how low their real expenses are is why net worth is a better measure of current wealth than current income is.
posted by burnmp3s at 12:07 PM on May 16, 2012 [10 favorites]


Oh dear. I went looking for the big jumps in money, trying to psyche myself up for a plan of attack on my own debt, and this wasn't what I was expecting:

Paying off the $25k was easy–I used money that was just sitting around [September 8]

Dude. DUDE.
posted by carbide at 12:07 PM on May 16, 2012 [74 favorites]


Although his income figures are considerably higher than my world, there is still some inspiration here to apply to my own finances. This is one of the better examples I've seen of someone walking through exactly how they met their financial goal with specific numbers and the impact of certain lifestyle changes. Plus I like his writing style, which makes this easier for me to digest than the typical "how to reduce your debt" article.
posted by Slack-a-gogo at 12:08 PM on May 16, 2012 [2 favorites]


Why did he need a blog, let alone an MBA from Harvard, to do this?

Because just quietly managing his money won't get him on to the speaking circuit.
posted by monju_bosatsu at 12:10 PM on May 16, 2012 [24 favorites]


Hey folks - the dude has an MBA from Harvard and is well-paid in a management job at Dell. He has no kids or family. It's pretty obvious that what he does likely won't apply to someone with a husband and kids paying off student loan debt from a poetry degree, so why bother announcing your displeasure in this thread?

Because just quietly managing his money won't get him on to the speaking circuit.

In your alternate reality, does everyone you don't immediately personally identify with have some ulterior motive for everything they do?
posted by downing street memo at 12:12 PM on May 16, 2012 [16 favorites]


unless you're 99%/working class/poor/starving/dead you are privileged

This guy is a little above "not poor and starving". If the bar for "inspiring" is now "going without $1300/month entertainment for 9 months" we are pretty doomed.
posted by DU at 12:12 PM on May 16, 2012 [34 favorites]


Yes, it is clear that his situation and strategies are not applicable to low- or even middle-income people for the most part. That does not mean that what he is talking about isn't interesting.
posted by Falconetti at 12:14 PM on May 16, 2012 [4 favorites]


Maybe if we just trim a zero off all his numbers, then they'll be less off-putting?
posted by gottabefunky at 12:14 PM on May 16, 2012 [3 favorites]


But no, unless you're 99%/working class/poor/starving/dead you are privileged and an obvious target for snark.

No, not poor/starving/dead, -- but a Harvard MBA grad (with accompanying social network) and an executive at a high-tech company reportedly making more than $50K but less than $100K/year.

Hey, great for you paying down $100K debt in less than a year by cutting back on expenses, but you have to expect some snark in the mix when the vast majority of people in financial straits have none of his immediate benefits, nor any of his future riches to look forward to even if they do somehow manage to unbury themselves.
posted by Celsius1414 at 12:14 PM on May 16, 2012 [7 favorites]


I make sure to never get out of debt so I can stay in touch with the people.
posted by michaelh at 12:14 PM on May 16, 2012 [18 favorites]


In your alternate reality, does everyone you don't immediately personally identify with have some ulterior motive for everything they do?

Actually, I pretty closely personally identify with him--I fall generally into the same demographic group, albeit slightly older and married now. Why do YOU think a Harvard MBA would start publishing a blog on money management, using his goofy personal experience to sell it in a kind of perverse Morgan Spurlockesque fashion? It couldn't POSSIBLY be because he has an interest in tapping into the lucrative inspirational/self-help/money management guru market, could it?
posted by monju_bosatsu at 12:17 PM on May 16, 2012 [6 favorites]


Other people have addressed the privilege comments, so I won't pile-on. I will say that his narrative contributes to the idea that student loan debt, even massive student loan debt, is not a problem so long as you are hard-working, responsible, and willing to make sacrifices. This is part of the standard conservative rhetoric about the nature of poverty. The reality is that, for many people, no amount of hard work, responsibility, or sacrifices will enable them to pay off their student loan debt in their entire working lives, much less in 10 months.

I want to know how to help those people and how to prevent more people from ending up in that same situation. The Harvard MBAs making above-average income in management positions at Fortune 100 companies can likely take care of themselves.
posted by jedicus at 12:19 PM on May 16, 2012 [67 favorites]


Okay so I thought some of his choices were a little crazy (weddings and Christmas are, to an extent, consumer frenzies, but they are also irreplaceable) but I actually quite liked the end of his last post. I have friends with substantial amounts of debt for BA degrees, who are employed at a percentage of what he is, and who do not consider things like: not buying clothing, bringing a flask, packing lunch, etc. They are well-aware of their student debt. They are managing to pay it off on the monthly plan, which is great! I am really, really lucky, and I don't have any debt. But I also don't make six figures, and some of the habits of avoiding clothing sales or never ordering lunch at work picked up in grad school have started slipping away. I could stand to save more, for the times when I will not be lucky, and this was a good reminder.
posted by jetlagaddict at 12:20 PM on May 16, 2012 [3 favorites]


I still have "finding a big sack of money" in my monthly budget, which fucks up my numbers pretty much every month. But when the day comes that I do find that big sack of cash, I will make sure to pay it forward and pass that advice on to the rest of you.
posted by Slack-a-gogo at 12:21 PM on May 16, 2012 [26 favorites]


> Shouldn't we approve of behavior like this?

Behavior like this is fine. Blogging about it is what makes it obnoxious.
posted by The Card Cheat at 12:21 PM on May 16, 2012 [3 favorites]


Isn't the entire point of going into debt for a Harvard MBA to get a well paying job at a Fortune 500 company, that then lets you pay off that debt?
posted by smackfu at 12:21 PM on May 16, 2012 [11 favorites]


Privilege has its advantages, I guess.

This privilege talk is getting really really old.


He's certainly fortunate in a number of ways. Not least of which is that he or a family member didn't get sick or have a bad accident during this process; it's worth mentioning that when he says "As cliche as it sounds..." about having his health and a healthy family, that is a really huge deal, and not everyone is that lucky.
posted by mhoye at 12:22 PM on May 16, 2012 [2 favorites]


If you make 1/10th of this money, and have 1/10th of this debt, this is still a good reminder that high salary != high money, unless you manage it well.
posted by davejay at 12:22 PM on May 16, 2012 [5 favorites]


THIS IS MY COMMENT WHERE I WAIL AND GNASH MY TEETH BECAUSE SOMEONE MAKES MORE MONEY THAN I DO AND HAS AN EASIER TIME ACHIEVING THE GOALS THAT I WISH TO ACHIEVE... casually forgetting the fact that I was a slacker in high school, college, and law school and therefore eliminated all possibility of pursuing such high-paying jobs.

Whomp. Fucking. Whomp.
posted by jph at 12:22 PM on May 16, 2012 [9 favorites]


Why do YOU think a Harvard MBA would start publishing a blog on money management, using his goofy personal experience to sell it in a kind of perverse Morgan Spurlockesque fashion?
Externally, I think the blog itself was actually quite effective in helping me achieve my goal. I can literally count on one hand the number of times I’ve ever flaked out on anything in my life, and while I complained from time to time about how uncomfortable it was to relive moments from especially difficult days by writing about them on my blog, I believe that making this challenge public was helpful to my follow-through.
posted by twirlip at 12:24 PM on May 16, 2012 [2 favorites]


Why the criticism of anyone, no matter how much money they make, taking on a challenge to live especially frugally to meet a goal?

Imagine he walked into an AA meeting and talked about how he met a self-imposed challenge to limit himself to just 3 drinks at a recent party. And that other people called him "inspiring" for doing so.
posted by DU at 12:24 PM on May 16, 2012 [13 favorites]


Oh, come now. He's been making sacrifices all over the place. He wasn't sure if his boss liked him enough to give him a BIG bonus (office median was $8K, he needed double that to close the gap in his arbitrary window of time), so he just went down the street and got a better, also-six-figure job on a lark. Problem is, that means 50-60 hour weeks for a couple of months to ramp up. Meanwhile, the house he had purchased had some extra rooms in it, so he just leased them out to some people, and that means having ROOMMATES. And he had to sell his second car AND his motorcycle, leaving just one car to get around in!

I for one feel the pain of his sacrifice both deeply and personally.
posted by Mayor West at 12:25 PM on May 16, 2012 [35 favorites]


If you make 1/10th of this money, and have 1/10th of this debt, this is still a good reminder that high salary != high money, unless you manage it well.

Yeah, that's definitely an important reminder, and it's good advice. However, it's also worth remembering that many of life's fixed expenses -- things like paying to renew the plates on your car or getting a prescription filled or the price of gas driving to work -- don't drop by 90% if you make less money. That's the part that makes it much, much harder the farther down on the income scale you go.

It needs an infographic or something. I guess my point isn't to snark or criticize; it really is an interesting blog, but for me the interesting part is how much light it sheds on the relative ease with which high-income-earners can dig out when they find themselves in debt.
posted by verb at 12:26 PM on May 16, 2012 [28 favorites]


Behavior like this is fine. Blogging about it is what makes it obnoxious.

I have to disagree; I see it as similar to someone like this (warning, daily mail article, but it is a good one.) On the one hand, yes, these people's circumstances aren't directly equivalent to ours (in the case of the linked video, for instance, we're talking about someone who obviously has a great deal of time to dedicate to their efforts) but they can still serve as an inspiration to some folks.
posted by davejay at 12:27 PM on May 16, 2012


Fair enough, I guess I disagree. I found what he wrote interesting in spite of the fact that he makes huge amounts of money and will likely make more in the future. But, I generally like reading about people who set ambitious goals and go out and make them happen. To me that's all this was.

I'm glad for the dude that he's got financial freedom, but I don't think his goal was that ambitious or that he sacrificed that much. I mean, I pretty much live his "no more student debt" life as my regular life, and the thing is, I just know it is not that hard. My life is not hard. I don't believe his life was that hard, either.
posted by Snarl Furillo at 12:28 PM on May 16, 2012 [6 favorites]


Oh yeah, and don't forget: admitting your goals and your efforts toward them publicly is actually very, very motivating. The act of blogging, or making a video to share, or whatever method you choose to say "I am doing this, world, notice me" comes with a great big scoop of "and because you notice me, I'll feel even worse if I stop doing this, so I'd damn well better succeed so I don't look like an ass." Very motivating.
posted by davejay at 12:28 PM on May 16, 2012


A lot of the comments so far feel like they're knocking the guy because he's not paying down as much debt other people, that he has a Harvard MBA so he should be better at managing his personal finances, that he has it a lot easier than the rest of us because he has a high income and only had to cut back on expenses that most of us can't afford anyway.

All that is fair, but I still think that paying down that much debt in that short amount of time is impressive. And from what I've seen, paying down so much so fast is not something that most people end up doing less than three years after they take out student loans (even with a graduate degree from a top school).

I work in family court. I have a very strange window into people's personal finances, from multimillionaires who have more fancy cars than they do fingers to the flat-out broke folk who can't find jobs despite their very best efforts and are about to be evicted. (They sit next to each other in the courtroom gallery, by the way.)

I wish I could boil down what I've learned from working there into to one memorable "life lesson"-type sentence, but I can't. Just know that statements to the effect of "well, if I were in his/her shoes, I could handle that financial situation better!" are frustrating to me. "Privileged white male with a Harvard degree, only has to cut back on expenses in order to pay off his debt, psh — other people have it worse!"-type statements are equally frustrating.
posted by hypotheticole at 12:28 PM on May 16, 2012 [9 favorites]


Why do YOU think a Harvard MBA would start publishing a blog on money management, using his goofy personal experience to sell it in a kind of perverse Morgan Spurlockesque fashion?

Why does anyone start a blog? To document their life, or some specific part of it. I did wrote a blog for awhile about my weight loss without the slightest thought of anyone ever reading or caring.
posted by downing street memo at 12:29 PM on May 16, 2012 [4 favorites]


I found what he wrote interesting in spite of the fact that he makes huge amounts of money and will likely make more in the future. But, I generally like reading about people who set ambitious goals and go out and make them happen. To me that's all this was.

Perhaps I'm getting the sense that he hopes to appeal to a wider audience than this is actually suited for. He thinks he can inspire not only the Ivy-League-grads-in-med-school, but also the "little guy," who in truth doesn't have a prayer of paying off debt early with money that just happened to be "sitting around."

It is possible to interpret his blog through a filter of "generally inspirational". But for many, the issue of debt relief and money hits a little too close to home at present to put yourself at the remove you'd need to be at in order to see this as just "guy diligently attains generic goal".
posted by EmpressCallipygos at 12:29 PM on May 16, 2012 [4 favorites]


Why the criticism of anyone, no matter how much money they make, taking on a challenge to live especially frugally to meet a goal?

Shouldn't we approve of behavior like this?

MoonOrb, I don't see it as a criticism of him, per se, but the implied arrogance in suggesting that his situation is directly relatable to 99% of his readers' life situation.

If you live above the poverty level by a significant multiplier, it's just not that impressive that you can erase debt quickly. It's like an article by a weightlifter on "how I managed to get all these 200-lb boxes on the top shelf" (hint: he lifted them one at a time).
posted by IAmBroom at 12:29 PM on May 16, 2012 [6 favorites]


He's going to be upset when the student debt bubble destroys the economy regardless of his personal responcibility. But I have to admit that it is good that he made a plan and met his goals.
posted by fuq at 12:30 PM on May 16, 2012 [1 favorite]



I can't really relate, I'm a bit annoyed that this pisher is better with his money than I am with mine.
posted by Ruthless Bunny at 12:30 PM on May 16, 2012


Oh wow, so the answer was to make a lot of money and not spend it. Thanks, guy.
posted by empath at 12:30 PM on May 16, 2012 [18 favorites]


Why the criticism of anyone, no matter how much money they make, taking on a challenge to live especially frugally to meet a goal?

Because hard-working, motivated, goal-oriented people piss me right the fuck off.
posted by BitterOldPunk at 12:31 PM on May 16, 2012 [29 favorites]


HBS: I forgot about interest
posted by fundip at 12:31 PM on May 16, 2012 [6 favorites]


IAmBroom: "MoonOrb, I don't see it as a criticism of him, per se, but the implied arrogance in suggesting that his situation is directly relatable to 99% of his readers' life situation."

Out of curiosity, who suggested that?
posted by zarq at 12:32 PM on May 16, 2012 [1 favorite]


it's also worth remembering that many of life's fixed expenses -- things like paying to renew the plates on your car or getting a prescription filled or the price of gas driving to work -- don't drop by 90% if you make less money.

An interesting point, and a valid one. I was thinking about this recently, that moving to a place with lower housing costs and lower salaries, for instance, doesn't equate to an across-the-board lowering of expenses, because lots of things are going to be more expensive relative to the lower salary, like (for instance) a car, or a computer. Not life's essentials, necessarily, but relevant to lots of people nonetheless.

and hey, if you were once poor, and now you're not, it is easy to say "hey, I'm not poor, I can splurge all the time" and end up wasting so much money, just painful amounts; it is good to get that reminder to sweat the small stuff. Not hard != not worthwhile.
posted by davejay at 12:33 PM on May 16, 2012 [2 favorites]


There are many students (socially, financially) like this guy who will find his blog to be an inspirational and practical guide to become debt free. But no, unless you're 99%/working class/poor/starving/dead you are privileged and an obvious target for snark.

Practical guide? His miraculous way of paying down his debt was to sell off his "second car," his motorcycle, and start renting out his "extra rooms" in his house to - horror of horrors - Crigslist strangers.

That is super practical, the rest of us can just get right on figuring out what to do with our extra cars and motorcycles and extra rooms in the houses we own.
posted by cairdeas at 12:33 PM on May 16, 2012 [16 favorites]


Why does anyone start a blog? To document their life, or some specific part of it. I did wrote a blog for awhile about my weight loss without the slightest thought of anyone ever reading or caring.

Look, maybe you're right, and maybe he is 100% honest when he says he documented it purely to create a bit of motivation and public accountability for his goal. But I'll bet you dollars to donuts that he has a book out next year. I don't even really mean that as a criticism. It's great that he set a goal and worked hard to achieve it, and maybe he can provide some useful advice to people. I'm just a natural skeptic.
posted by monju_bosatsu at 12:35 PM on May 16, 2012


I graduated from Harvard Business School with my MBA and $101k of student debt in May 2009 and I had made 21 monthly loan payments of $1,057 since then. I was expecting to see a balance of around $80k or so.
I had failed to take interest into account; the balance actually stood at $90,717.




I think the real issue here is that doofus spent hundreds of thousands of dollars on an MBA (note that middle letter, it stands for “Business”) and graduated not knowing how interest works.

From Harvard.
posted by Shepherd at 12:35 PM on May 16, 2012 [63 favorites]


If you make 1/10th of this money, and have 1/10th of this debt, this is still a good reminder that high salary != high money, unless you manage it well.

Well, of course, if you only make 1/10th of his money and have 1/10th of his debt, remember to only eat 1/10th the amount of food, use 1/10th the amount of electricity, pay 1/10th as much for insurance and rent, and you'll be good to go.
posted by AzraelBrown at 12:36 PM on May 16, 2012 [2 favorites]


That is super practical, the rest of us can just get right on figuring out what to do with our extra cars and motorcycles and extra rooms in the houses we own.

Who said that he's targeting people like you with his writing? Not everything published online has to apply to you or me for that matter.
posted by Foci for Analysis at 12:37 PM on May 16, 2012 [2 favorites]


> Paying off the $25k was easy–I used money that was just sitting around [September 8]

Dude. DUDE.


That $25,000 wasn't just "sitting around," it was in his backpack. It only seemed like it was sitting around because he couldn't see the backpack.
posted by The Card Cheat at 12:37 PM on May 16, 2012 [12 favorites]


$1,300 per month on entertainment

Sound to me like could have just found some cheaper hookers.
posted by signal at 12:38 PM on May 16, 2012 [2 favorites]


The point is, it's not that people just want to snark. It's galling when millions of people are choosing between eating and going to the doctor for some rich guy to blog about how easy it really is to pay down debt, all we have to do is just sell off our motorcycles and extra cars. The implication being that other people who are having problems paying down their debt are just deficient compared to him. When the reality is just simply that he could pay down his debt so easily, in large part, because he had lots of dough. That's hardly a revelation, that all you need is lots of dough and you can be debt free.
posted by cairdeas at 12:38 PM on May 16, 2012 [6 favorites]


You would think everyone on here is destitute sometimes.
posted by smackfu at 12:39 PM on May 16, 2012 [2 favorites]


THIS IS MY COMMENT WHERE I WAIL AND GNASH MY TEETH BECAUSE SOMEONE MAKES MORE MONEY THAN I DO AND HAS AN EASIER TIME ACHIEVING THE GOALS THAT I WISH TO ACHIEVE... casually forgetting the fact that I was a slacker in high school, college, and law school and therefore eliminated all possibility of pursuing such high-paying jobs.

Whomp. Fucking. Whomp.
posted by jph


HERE IS MY COMMENT WHERE I ASSUME THAT EVERYONE THAT ISN'T ROLLING IN MONEY MUST BE LAZY/DUMB/A SLACKER AND IS A JEALOUS HATER.

I wish I lived in your black and white world. If you're not running for a Republican office you've missed your calling.

Good for him. It's amazing how many people that make loads of money barely get by because of their spending. But come on, there's only so much inspiration you can get from someone that cut back from spending 1,300 a month on entertainment.
posted by justgary at 12:41 PM on May 16, 2012 [9 favorites]


Because hard-working, motivated, goal-oriented people piss me right the fuck off.

People who were born in the right circumstances, with the right skills and with the right connections and expect everyone else to do as well as them piss me right the fuck off.
posted by Tarumba at 12:42 PM on May 16, 2012 [5 favorites]


Oh, actually, I was really just talking about myself justgary. But way to project there, buddy.
posted by jph at 12:43 PM on May 16, 2012 [2 favorites]


Hm. I read this...

During the past seven months, I haven’t gone on a single dinner date or been to the movies. I took a flask with me every time I went out with friends, I stopped contributing to my 401k, I didn’t go home for Christmas, and I missed my friends’ bachelor parties and weddings. I got better at DIY and figured out things like how to use duct tape to repair my car and zip-ties to repair my house.

In the past seven months, I haven’t bought a single article of clothing or a single “must-have” gadget or gizmo. I’ve completely eschewed consumerism, and it actually felt pretty good.

To make extra money, I rented my spare bedrooms to strangers on Craigslist, I tried pedi-cabbing, and I started a landscaping business.

I sold my second car, my motorcycle, my roadbike, and a bunch of random junk on Craigslist. I got rid of things that I thought I could never live without, and it actually felt pretty good.


And I thought about my own efforts in this direction, how I have spent the last four months saying "I will not go out to dinner or lunch this month"...and failed every month. How I can't bring myself to stop contributing to my 401K, even though I could make great strides if I did. How I just bought new shoes, although I did repair my boots instead of replacing them. How I felt really good about making progress, and then I bought an iPad on a whim, because I'm not as disciplined as I need to be. How I have a scooter in my garage that I can't bring myself to sell, even though I'm not riding it right now, and my garage is full of junk that I might be able to sell if I got off my ass. How I keep thinking about taking a job on Saturday nights/Sundays (the only time I have free) and yet haven't done so.

And meanwhile, there's my second mortgage, the one keeping me from doing better than breaking even, even though I feel like I've cut so many expenses. And the truth is, it isn't the second mortgage, it is my own habits that are still keeping me down.

So yeah, focus on the motorcycle, the second car, the room renting if you want...but can you go seven months without eating out? Can you BYOB to a bar your friends are hanging out at? How many jobs do you have? My point being that you can't cherry-pick the stuff that doesn't relate to you, without ignoring stuff that is relevant to many people. I'll just go ahead and be inspired by this. I guess that makes me the 1% (of people who will be inspired by this.) Heh.
posted by davejay at 12:43 PM on May 16, 2012 [29 favorites]


Metafilter: everything published online has to apply to you or me.
posted by michaelh at 12:45 PM on May 16, 2012 [3 favorites]


So yeah, focus on the motorcycle, the second car, the room renting if you want...but can you go seven months without eating out? Can you BYOB to a bar your friends are hanging out at?

If you're unemployed you have no choice but to do these very things. I think this is where some of the ire is coming from.
posted by EmpressCallipygos at 12:45 PM on May 16, 2012 [7 favorites]


oh yeah, and when my dishwasher, clothes dryer and furnace all crapped out earlier this year, I did the research, bought the parts and fixed 'em all myself, and I'm damn proud of that. I'm also aware that I should be grateful I can afford a dishwasher, clothes dryer and furnace in the first place, as well as the replacement parts, and believe me, I am. But I still saved a lot of money fixing them myself, even though I had to learn how and made several false starts that cost me time and money.
posted by davejay at 12:46 PM on May 16, 2012


The lesson is that people who make more money can make more money?

But you know what? It really is criminal how little we invest in promising young people, making them drown in a pool of debt.
posted by inturnaround at 12:46 PM on May 16, 2012 [4 favorites]


If you're unemployed you have no choice but to do these very things. I think this is where some of the ire is coming from.

I hear you. I guess my perspective is skewed a bit by my having been raised middle class, then spending several years poor, then eventually being middle class again; I see "people with money saving money is [grar grar]" and I think "well, if people with money save money, then they'll have that money when they're unemployed", because I always assume employment and socioeconomic status ebb and flow.
posted by davejay at 12:48 PM on May 16, 2012


Can you BYOB to a bar your friends are hanging out at?

Please don't do this. If you aren't going to buy a drink, don't bring your own.
posted by josher71 at 12:49 PM on May 16, 2012 [8 favorites]


You would think everyone on here is destitute sometimes.

Nah, but few people enjoy or admire the struggles of the rich when they're really struggling. It's not surprising that a lot people on Metafilter are reacting negatively to the blog.

FWIW, the most interesting parts are in the Mission Accomplished post. He talks about what he learned and whether he'll go on a shopping spree with the extra $1K a month and go back to his old life style or not.
posted by Brandon Blatcher at 12:50 PM on May 16, 2012


Who said that he's targeting people like you with his writing? Not everything published online has to apply to you or me for that matter.

Then who is he targeting? He was making $52,000 a year and borrowed a hundred large for an Ivy League graduate degree. What on earth does that have to do with the 87% of Pell Grant-eligible undergraduates who leave college with loan debt? Or the 96% of students at private for-profit colleges who graduate with debt?*

*click the June '10 fact sheet
posted by Snarl Furillo at 12:51 PM on May 16, 2012


There are aspects of his story that are inspirational and aspects which are totally unrelatable and perhaps a little obnoxious in a tale ostensibly meant to be about sacrifice to meet a goal (like being able to use 25k just sitting around, selling the extra car, cutting back on the 1300/month entertainment, etc).

I will say that the time I was making 25k a year and able to pay off 12k debt per year over three years seemed, at the time, to be one of the greatest personal achievements I've ever accomplished.

That said, a few of the points in his story are really irritating. One is that he stopped contributing to his employer-matched 401k in order to pay off debt that was costing him only a little over 3% interest. That's a stupid financial strategy for anyone. The drive to be debt-free is laudable, but in this case, the emotions took him in a direction that was totally unwise, fiscally.

Good for him, for being debt free and well-employed, though!
posted by darkstar at 12:51 PM on May 16, 2012 [6 favorites]


Apparently successful people sharing their experiences and life stories is now yet another thing metafilter doesn't do well.

Is there an income ceiling beyond which you just shouldn't have a personal website or blog?
posted by jsturgill at 12:52 PM on May 16, 2012 [6 favorites]


For the 15 months leading up to my NMHD challenge, I was spending an average of $7,754 per month, and that figure excludes my student loan payments. During the past seven months, the average has been $3,129.

Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives?
posted by vidur at 12:52 PM on May 16, 2012


I guess my perspective is skewed a bit by my having been raised middle class, then spending several years poor, then eventually being middle class again; I see "people with money saving money is [grar grar]" and I think "well, if people with money save money, then they'll have that money when they're unemployed", because I always assume employment and socioeconomic status ebb and flow.

I'd imagine your reponse may have been different, then, if this caught you in the "poor" phase. I've had similar luck, but the "back to middle class" is only just now kicking in, and I know that I always bristled at all of the well-meaning advice to save money because "oh, yeah, after I pay rent and utilities and buy food maybe I'll have a whole three cents, whoop-te-do."
posted by EmpressCallipygos at 12:52 PM on May 16, 2012 [4 favorites]


Apparently successful people sharing their experiences and life stories is now yet another thing metafilter doesn't do well.

Is the only good outcome where everyone loves the FPP subject and everyone agrees? If that doesn't take place we're doing things badly?
posted by cairdeas at 12:54 PM on May 16, 2012 [5 favorites]


Hey, take a look at my Harvard debt blog. It's about how I payed off my Harvard student loans resulting from my MBA at Harvard. It sure was hard to pay off all that debt racked up from Harvard that resulted from my earning a Harvard degree. Did you know I went to Harvard? Harvard.
posted by WhitenoisE at 12:54 PM on May 16, 2012 [4 favorites]


Apparently successful people sharing their experiences and life stories is now yet another thing metafilter doesn't do well.

I think MetaFilter's doing it pretty well. Some people think it's inspiring, others think it's grating, and a discussion about the reasons for those different reactions. Nobody's been attacking anyone else, and things haven't gotten fighty. 'Metafilter doesn't do X well!' isn't a code-word for 'I disagreed with a lot of the commenters on a mefi thread.'


Is there an income ceiling beyond which you just shouldn't have a personal website or blog?

Not at all; there's a lot of interesting writing by people with high incomes. For example, Angelina Jolie's post about how easy it is to get a job if you just submit a lot of applications.
posted by verb at 12:56 PM on May 16, 2012 [4 favorites]


That said, a few of the points in his story are really irritating. One is that he stopped contributing to his employer-matched 401k in order to pay off debt that was costing him only a little over 3% interest. That's a stupid financial strategy for anyone. The drive to be debt-free is laudable, but in this case, the emotions took him in a direction that was totally unwise, fiscally.

I missed the employer-matched part. In that case, it is profoundly stupid to stop contributing in order to pay off 3% student loans. He's just giving away free money at that point.
posted by monju_bosatsu at 12:56 PM on May 16, 2012


That is super practical, the rest of us can just get right on figuring out what to do with our extra cars and motorcycles and extra rooms in the houses we own.

Ten bucks says metafilter demographics skew pretty far towards second cars, expensive toys, and nice houses.
posted by Forktine at 12:56 PM on May 16, 2012 [2 favorites]


vidur: "Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives"

Dunno about Dallas, but for a period of about 1.5 years, I went out every night on about that. However, I did not date, and was drinking Old Style.
posted by notsnot at 12:56 PM on May 16, 2012


Is there an income ceiling beyond which you just shouldn't have a personal website or blog?

Not if you blog about knitting or sports or bicycles or photography tips or cooking or books you like or physical fitness or cool stuff on the Internet or learning a foreign language or volunteering at an animal shelter or awesome movies or places you would like to travel or car shows or gardening or model trains or great albums or bad albums or playing the guitar or dating or excellent liquor or interpersonal relationships or sex or housecleaning or found notes and art or history or psychology or video games or math.

If you blog about how hard it was to pay off your debt by selling your second car (when "you" are one person and not a two-adult household or something) and not getting a new phone, then yes, there is.
posted by Snarl Furillo at 12:57 PM on May 16, 2012 [2 favorites]


Apparently successful people sharing their experiences and life stories is now yet another thing metafilter doesn't do well.

It's not really that, though. Consider the James Cameron Deep Sea Challenge post. That was, in many ways, a rich person blogging (well, tweeting) about their experience. It went pretty well.

That's an example of a rich person blogging about an experience that is unobtainable for a normal person. It's fun to live vicariously through other people's interesting experiences, whether they be rich, athletic, highly skilled, insanely lucky, or whatever. But this isn't that.

Here the person is blogging about an all-too-obtainable experience: having student debt. Paying it off quickly is unusual, but he didn't pay it off in a particularly interesting way (e.g. a bizarre scholarship just for left-handed people named Steve Thomas, or finding buried pirate gold, or whatever). He paid it off by making a lot of money and not having a lot of expenses. Ultimately it reduces to "here's a particularly grating example of how wealthy people have it better than non-wealthy people." Reminders of the benefits of wealth and how being poor makes their lives worse is not something people generally seek out or enjoy hearing about.
posted by jedicus at 1:01 PM on May 16, 2012 [15 favorites]


Is there an income ceiling beyond which you just shouldn't have a personal website or blog?

No, feel free to talk about your moneys all you want if you want to look tacky and out-of-touch with 99% of America.

(And if you end up getting robbed (or first against the wall when the revolution comes), don't come crying to me.)
posted by entropicamericana at 1:02 PM on May 16, 2012 [1 favorite]


Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives?

I now make a bit more than that, but that's roughly the range I've spent basically my whole adult life in. $3000/month, after taxes.

I live alone, I go out to eat often, date regularly, spend pretty freely when I do. I used to have a car payment, too. Granted, I wasn't putting much away - but the short answer to "What kind of lifestyle can a single man have on $3000" is "A perfectly fine one, thankyouverymuch."
posted by Tomorrowful at 1:02 PM on May 16, 2012 [1 favorite]


Yeah, lose your job, have kids, encounter a few unexpected medical bills and a major issue with your car...have your rent raised (oh wait, he was able to leverage his mortgage on his house if needed), live in the Bay Area...and this guy's "Mission Accomplished" would be like wearing a codpiece flight suit on an aircraft carrier.
posted by Chuffy at 1:02 PM on May 16, 2012 [1 favorite]


EmpressCallipygos: " I'd imagine your reponse may have been different, then, if this caught you in the "poor" phase. I've had similar luck, but the "back to middle class" is only just now kicking in, and I know that I always bristled at all of the well-meaning advice to save money because "oh, yeah, after I pay rent and utilities and buy food maybe I'll have a whole three cents, whoop-te-do.""

Here's what I don't understand: I do not see him giving people advice by saying, "I'm totally in your exact situation and this is what you should do to get out of it." I really don't see that anywhere on his blog, and I've read a great deal of it. The most he ever seemed to say was that some people reading his blog might get something out of it. And that by reducing unnecessary expenses and using his life's savings he was able to accomplish something. He acknowledged that his entire situation was very lucky: he has a really good job, a high salary, low personal expenses, no illnesses, no family to support, no crises, no real problems and he was living in an area of the country where the cost of living is very low.

I have mostly stayed out of this conversation because I'm the OP and I don't want to steer the thread, but I feel like I'm reading a ton of defensive reactions that aren't really based on his actual words. I think he made some deeply stupid choices that I personally wouldn't have made. If I had a life's savings of 25K I certainly wouldn't make it vanish overnight to pay off a low-interest loan, for example. But I'm not really seeing how he's lecturing the rest of us regarding how we can spend down out debt. Nor (as someone said above,) implying that we're somehow deficient for not following his advice.
posted by zarq at 1:03 PM on May 16, 2012 [6 favorites]


What kind of lifestyle can a single man have on $3000?

In Manhattan, that's what a lot of people call "rent + utilities".
posted by gagglezoomer at 1:03 PM on May 16, 2012 [1 favorite]


vidur: "Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives?"

Totally doable here in Corvallis OR:

* 2 BR apt: 850
* cable, internet, electricity, netflix: 170
* food: 300
* dining: 300
* gas: 30
* income tax: 300
* health insurance: 300
* medical expenses: 300
* hookers & blow: 450

Obviously NYC is a silly place and you'd want to factor in extra cost of living into your salary, or try to avoid living or working there.
posted by pwnguin at 1:07 PM on May 16, 2012 [1 favorite]


If I had a life's savings of 25K I certainly wouldn't make it vanish overnight to pay off a low-interest loan, for example.

Some people (more so the conservative-minded ones, I've found) have this almost irrational "debt-fright". One of my friends, for example, makes around $200,000 a year but wouldn't spend more than $8500 for a car when he needed one because that's all he had in his savings. Without even remarking on how stupid it is to drain your savings to buy a car, I couldn't figure out why he wouldn't just take out a fucking 2 or 3 year 2.5% loan and buy a nice car.
posted by gagglezoomer at 1:07 PM on May 16, 2012 [3 favorites]


It's a fair comment, zarq.

I think a lot of the defensiveness is coming from run-ins with other people who point to guys like him and say, "well, he didn't have any problem paying things down, so what's the big deal?" Many of these other people are in our government, to add insult to injury...

So the blogger may acknowledge that he's had a lot of luck and is starting from a lucky place, but Sen. Roscoe H. Blowhard is going to conveniently overlook that when he incorporates a story about ths blogger into his latest stump speech.
posted by EmpressCallipygos at 1:08 PM on May 16, 2012 [5 favorites]


I'm happy he paid off his debt. I'm happy he made a decision and stuck to it.

But I have become horrifically cynical lately. I hope this is in earnest, But it's very hard, at this moment, when the discussion of lowering student debt has come to the mainstream, and when the president is addressing it, for me not to feel like maybe, just maybe, there is something else going on here. Because the hidden narrative, as mentioned above, is that students can pay off their debts, all they need to do is tighten their belt buckle a little.

Now, maybe this isn't meant as a self-help guide for anybody else but the guy writing. But it's an awful useful time for this narrative to be coming out. It reminds me a bit of that guy who pretended to be homeless just to show that he could get himself off the streets and into a pretty okay life in a short while, but neglected to recognize that a lot of homeless people have unaddressed mental illness, which he didn't. The takeaway shouldn't be: Gosh, it's easy to get off the street. It should be: Gosh, it's easy to get off the streets if you're a college educated white man with no mental illness.

In the same way, it's pretty easy to pay down debt if you have thousands of dollars to spend per month on entertainment. If you have so little that you're just barely managing to pay what's due, you may not be able to pay what you owe, and that's often the case for college grads who are burdened with massive debt. I mean, bully for this guy, but that means nothing for people who don't share his circumstance.
posted by Bunny Ultramod at 1:08 PM on May 16, 2012 [16 favorites]


I do not see him giving people advice by saying, "I'm totally in your exact situation and this is what you should do to get out of it."

My problem isn't with the blog itself. Wealthy successful guy wants to talk about how his wealth was useful to him? Great. Indeed, the blogger is right: he was able to do what he did through a very uncommon combination of positive factors that apply to very few people. And the very few people it does apply to will probably be able to handle their debt just fine, one way or another.

My question is, given all that, why should almost anyone care about what he has to say?
posted by jedicus at 1:09 PM on May 16, 2012 [1 favorite]


pwnguin: " * cable, internet, electricity, netflix: 170"

Holy shit. I pay that for cable tv, phone and cable internet here in NYC. ($169, including one premium channel: hbo and on demand. Electric is $200 during a month when we don't run the air conditioners that much. Netflix on top of that. Wow.
posted by zarq at 1:09 PM on May 16, 2012


...but I feel like I'm reading a ton of defensive reactions that aren't really based on his actual words.

This isn't about his actual words. It's a highly paid (compared to a lot of Mefites) Harvard graduate talking about his money problems from getting his expensive Harvard degree. When people are living close to the edge or just making less money, a lot of people will take it as attack of sorts when said Harvard Graduate talks about how paying off debt isn't rocket science.
posted by Brandon Blatcher at 1:10 PM on May 16, 2012


He was making $52,000 a year and borrowed a hundred large for an Ivy League graduate degree. What on earth does that have to do with ... undergraduates?

Good question. How about you get some stats about people entering grad school, especially for an MBA? That's actually possibly a relevant demographic.
posted by jacalata at 1:10 PM on May 16, 2012


This isn't about his actual words

Honestly, I doubt most people even read the article, just the blurb at the top of this page. Why let the facts get in the way of ranting against the well off?
posted by smackfu at 1:12 PM on May 16, 2012 [3 favorites]


gagglezoomer: " Some people (more so the conservative-minded ones, I've found) have this almost irrational "debt-fright"."

Interesting. You can see some of this in action in his Mission Accomplished post. He mentions that if he'd thought ahead and not imposed the deadline on himself, he wouldn't have had to sell certain things.

posted by zarq at 1:12 PM on May 16, 2012


And that by reducing unnecessary expenses and using his life's savings he was able to accomplish something. He acknowledged that his entire situation was very lucky: he has a really good job, a high salary, low personal expenses, no illnesses, no family to support, no crises, no real problems and he was living in an area of the country where the cost of living is very low.

That's what's weird to me, though. The whole blog basically amounts to, "I got some very lucky breaks." Sure, my first reaction is, "Okay, student loans are a big issue in America and for a lot of people personally, so this is supposed to be instructive." But, okay, I'm going to move past that and say it's not supposed to be instructive, it's just a guy telling you about his life, right? But then I'm not sure what's interesting about the whole thing, you know? Like, I am glad for him that's he's financially secure, that's really great, a lot of people with similar incomes go their whole lives without attaining that. But I feel like there's no there there.
posted by Snarl Furillo at 1:12 PM on May 16, 2012


Totally doable here in Corvallis OR:

No car I guess. That seems like a pretty major expense that most people in the US have.
posted by smackfu at 1:14 PM on May 16, 2012


Good question. How about you get some stats about people entering grad school, especially for an MBA? That's actually possibly a relevant demographic.

Because most people in the US don't go to graduate school, so most student debt and most people with student debt have it from their undergraduate education. Part of the reason this blog (and to a certain extent similar discussions about stuff like law school debt) bothers me is that it moves the conversation about student debt to well-compensated business professionals with post-graduate degrees at the expense of the people who are actually disproportionately burdened with student debt in America- poor people who borrow to attend a for-profit college or a local comprehensive university.

If the conversation about the problem of student debt starts with the assumption that most debtors could pay off their six-figure loans with less than a year of belt-tightening, then it doesn't seem like there's much of a problem with student debt, right? But there is. Because this guy is an outlier.
posted by Snarl Furillo at 1:19 PM on May 16, 2012 [1 favorite]


I suppose it would have been better if he had written in terms of percentages.

It's a bit blargh worthy when one reads about someone's former "entertainment" budget equaling more than half of one's monthly paycheck.

There's nothing wrong with his blog or his desire to share it. Given the 99% tendencies of Metafilter, it might have been a bit strange not to expect this type of response. I'm all for someone paying off their debt, but like someone mentioned above, don't expect me to cheer exuberantly for them when they swim across the English Channel towed by a powerboat.
posted by Atreides at 1:20 PM on May 16, 2012 [1 favorite]


[Expanding on my last comment about what I learned about finances from working in family and having a little window into people's lives.]

"Well, if I were in his/her shoes, I could handle that financial situation better!" statements frustrate me not because they aren't true — in most cases, I think those statements are true. But the reason they're true is that you are on the outside looking in. Locating the problem is so much easier from that perspective.

This happens in family court all the time. Opposing counsel will put a litigant on the stand and grill him about the financial choices he made. "You borrowed money from your mother for your mortgage while still paying for your country club membership?" "Instead of sticking with your perfectly fine car, you bought a much fancier one that you can't afford, while still stuck with hundreds of thousands of dollars left in mortgage payments?" "Here's a chart of your dining-out expenses from the last year. How do you reconcile that with asking your recently-laid-off ex-wife to split your child's college expenses?"

It's blindingly obvious to everybody except the litigant: He made a bad financial choice.

The first few times I saw this happen, I rolled my eyes. "Irresponsible with money, and in this economy — how could he?!"

And then I saw it happen again. And again. And again.

And eventually I came to understand. "There but for the grace of God go I."

— These people were irresponsible with their money.
— They didn't intend to be.
— They recognize that they made a bad decision but still don't understand the magnitude.
— They will genuinely try to be better about their money.
— Most of them will continue to make more financial mistakes.
— If you showed them another case file with litigants who also made bad financial decisions, they would be able to point out the financial mistakes made by those litigants.

They have adjusted to the (temporary) lifestyle that comes with bad, short-sighted financial decisions. (After all, it's a nice lifestyle while it lasts!) They are trying to adjust back to the lifestyle that is actually in their budget, and they are struggling very badly.

And for what it's worth, most of them did not grow up with that lifestyle. (They weren't obscenely privileged, spoiled children who grew up into entitled and financially irresponsible adults.) They grew up with parents who were reasonably financially responsible, and they were at one time financially responsible too.

Then one month they spent a little more than they should have, and found that it didn't drastically affect their finances. They did it again a few months later. And again. They were toeing the line. And then they spent a little more the following month. And then again. And now they're in court on the witness stand, being questioned by opposing counsel about their financial decisions, and they're realizing that the line they were toeing is now a speck in the distance behind them.

"There but for the grace of God go I."
posted by hypotheticole at 1:20 PM on May 16, 2012 [26 favorites]


Student loan debt should be proportional to average-income post-graduation for each different major.

There. I said it.
posted by blue_beetle at 1:20 PM on May 16, 2012 [2 favorites]


I get the GRAR, I really do, but I'd rather live in a world where people making a lot of money prevent the big banks from leeching more interest money out of the general population.

The guy isn't actively scorning anybody, as far as I can tell. Yes, assholes will hold him up as a model of behaviour against people who don't have his choices and luck, which is what assholes do, but given the choice between:

a) wealthy well-employed graduate pays Goldman Sachs a shit-ton of interest, forever and
b) wealthy well-employed graduate pays off his loan fast, and puts his surplus interest money towards people that actually provide goods and services...

...I'll take the latter.
posted by Shepherd at 1:22 PM on May 16, 2012 [3 favorites]


If only you could choose your major...
posted by smackfu at 1:22 PM on May 16, 2012 [1 favorite]


Slight derail: wasn't there a scientist - mathematician or physicist - who did something similar, adopting an extreme savings plan - like living in a tent - his first years with a paying job, so that he could save almost his whole income because by investing so much money relatively early in his life it would generate enough income to allow him to live independently later on?
posted by RandlePatrickMcMurphy at 1:26 PM on May 16, 2012 [1 favorite]


Part of the reason this blog (and to a certain extent similar discussions about stuff like law school debt) bothers me is that it moves the conversation about student debt to well-compensated business professionals with post-graduate degrees at the expense of the people who are actually disproportionately burdened with student debt in America- poor people who borrow to attend a for-profit college or a local comprehensive university.

Student debt is indeed a problem for poor people, but please don't be under any illusions about the conditions of people with law school debt. There's been a great deal of writing on the blue, and elsewhere, about the employment vs. debt prospects of law grads. It's not like they can't both be screwed.
posted by gauche at 1:26 PM on May 16, 2012 [1 favorite]


Part of the reason this blog (and to a certain extent similar discussions about stuff like law school debt) bothers me is that it moves the conversation about student debt to well-compensated business professionals with post-graduate degrees at the expense of the people who are actually disproportionately burdened with student debt in America- poor people who borrow to attend a for-profit college or a local comprehensive university.

This sounds like saying we shouldn't talk about people who are 'struggling middle class' because then we'll ignore homelessness. This guy is only an outlier if you stick him into the population 'people with student debt'. He's a regular member of the group 'employed people who decided to get an MBA' and I think dismissing the possibility of discussing that group for fear of confusing them with '18 year olds who signed away $50,000 per year for poetry because society promised them they needed it and it would be worth it' is foolish.
posted by jacalata at 1:27 PM on May 16, 2012 [1 favorite]


smackfu: "No car I guess. That seems like a pretty major expense that most people in the US have."

Actually, that was the gas expense (public transport is decent here). Arguably, I should include a depriciation rate on a vehicle. Straight line deprication on a 18000 dollar car is 150 a month. Insurance is another 50. And I really overestimated the food budget. But really, if we want to keep better track of this, I should set up a Google doc spreadsheet.

RandlePatrickMcMurphy: "Slight derail: wasn't there a scientist - mathematician or physicist - who did something similar, adopting an extreme savings plan - like living in a tent - his first years with a paying job"

That would be Walden, a book written to convince PhD candidates to be content with their meager stipend =)
posted by pwnguin at 1:28 PM on May 16, 2012 [1 favorite]


Student debt is indeed a problem for poor people, but please don't be under any illusions about the conditions of people with law school debt.

The blogger is an MBA, not a lawyer, and most lawyers aren't business professionals. So while your concerns are valid, they're not really applicable here.
posted by jedicus at 1:29 PM on May 16, 2012


EmpressCallipygos: "I think a lot of the defensiveness is coming from run-ins with other people who point to guys like him and say, "well, he didn't have any problem paying things down, so what's the big deal?" Many of these other people are in our government, to add insult to injury...

So the blogger may acknowledge that he's had a lot of luck and is starting from a lucky place, but Sen. Roscoe H. Blowhard is going to conveniently overlook that when he incorporates a story about ths blogger into his latest stump speech.
"

OK, I can see that. It makes sense.

You know, there were definitely a few things I really thought worth criticizing in his methods and assumptions. But attacking the guy because someone else might use him as an example to nefarious ends seems like an odd choice.
posted by zarq at 1:29 PM on May 16, 2012


Because the hidden narrative, as mentioned above, is that students can pay off their debts, all they need to do is tighten their belt buckle a little.

Sure, there is that larger narrative, and this story can fit into it that way. But on the other hand, this guy doesn't even have a six-figure salary. He's very privileged, and he's a lot wealthier than you or me, but he's a hell of a long way from being part of the 1%. I feel like we misdirect our (entirely justified) anger when we point it at him, instead of at the people who are actually responsible for economic injustice.
posted by twirlip at 1:30 PM on May 16, 2012 [2 favorites]


I had a friend who did something similar - he paid down a lot of debt in a short period of time by moving to a shitty, tiny basement apartment, staying in most nights and tutoring 5 days a week on top of his sub-$30K job.

I have about $25K of credit card debt, down from about $45K a few years ago. It's been hanging over my head for about 7 years now. I have a good job now, but I've had periods of unemployment where it caused intense anxiety. I came very close to going bankrupt (and in retrospect, I probably would be better off if I had, although there were extenuating circumstances).

On my current repayment schedule, it will probably take me another 2.5 - 3 years to be debt free. This guy had a lot of options that I don't (selling a car, savings in the bank etc.). That said, a lot of his choices are possible for me -- I just don't want to make them. For example, I don't have spare rooms that I could rent out, but I could choose to move to a shared apartment. I could stop going out and spending on food, drinks and entertainment -- but I choose to have a social life. I think those choices are important to my mental well-being. I guess in the end I have chosen long-term, low level anxiety over debt over a short-term period of concentrated misery.
posted by sevenyearlurk at 1:32 PM on May 16, 2012 [4 favorites]


attacking the guy because someone else might use him as an example to nefarious ends seems like an odd choice.

I wasn't clear, then; my train of thought is that that's more of a gut-level, instinctive RE-active thing, rather than something as thought-out as you're saying; it's not so much "oh, this guy's blog could be misinterpreted, so I shall critique it", it's more like "good god I"ve had to listen to stuff like this from my mother for the past 5 years because she's a Glenn Beck addict and she's always sending me these financial-planning workbooks because she just doesn't freakin' get it and oh god here comes another one grar snarl foam bleh".
posted by EmpressCallipygos at 1:34 PM on May 16, 2012 [1 favorite]


Brandon Blatcher: "a lot of people will take it as attack of sorts when said Harvard Graduate talks about how paying off debt isn't rocket science."

I totally understand that. But my impression here, and feel free to correct me if I'm wrong, is that he's talking about paying off his own debt not being rocket science. Not the paying off debt in general.
posted by zarq at 1:34 PM on May 16, 2012


But I have become horrifically cynical lately. I hope this is in earnest, But it's very hard, at this moment, when the discussion of lowering student debt has come to the mainstream, and when the president is addressing it, for me not to feel like maybe, just maybe, there is something else going on here.

Yes, this dude racked up six figures of business school debt five years ago, began paying it back last August, launched a blog, all to perfectly coincide with a week-long Obama campaign push on student loan debt.

Those dastardly Republicans/1%'ers!!!!!!
posted by downing street memo at 1:35 PM on May 16, 2012 [3 favorites]


EmpressCallipygos: "it's more like "good god I"ve had to listen to stuff like this from my mother for the past 5 years because she's a Glenn Beck addict and she's always sending me these financial-planning workbooks because she just doesn't freakin' get it and oh god here comes another one grar snarl foam bleh"."

Heh. :)

Yeah, I understand now. Been there. Went to the lectures. Bought the damned workbooks....
posted by zarq at 1:36 PM on May 16, 2012


Unfortunately, for many people, this is not how the world works. I filed a Chapter 7 bankruptcy within this past year for a couple who found themselves over $35,000 in debt. This was their second bankruptcy in the past 12 years. The husband was making $11 an hour and the wife was disabled. Medical bills did them in. They lived in a trailer park and had relatively few possessions. It's only a matter of time before medical bills catch up with them again.
posted by Jurbano at 1:43 PM on May 16, 2012 [1 favorite]


$1,300 per month on entertainment

And there's 1/6th of his solution already. Reduce the 10% 401k to 5% for a year and sell a car and you are done.


That was my initial thought too. What's up here? Beanplating or viral marketing?

I mean, I pretty much live his "no more student debt" life as my regular life, and the thing is, I just know it is not that hard. My life is not hard. I don't believe his life was that hard, either.

Ditto.

Yes, it is clear that his situation and strategies are not applicable to low- or even middle-income people for the most part. That does not mean that what he is talking about isn't interesting.

Hmm. It kinda does. I guess I wonder what is new or interesting here?

Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives?

No problem in San Francisco. With roommates, you'll pay $400-$1,000/mo. rent. $3,000/mo. is darn good money most anywhere in the US. Plenty of money for hookers and blow.

I’ve completely eschewed consumerism, and it actually felt pretty good.

I'm all for that. Save money by not buying shit.

I missed my friends’ bachelor parties and weddings

Not so much for that.

But I Might Die Tonight
posted by mrgrimm at 1:44 PM on May 16, 2012 [1 favorite]


Although really there shouldn't be so much emphasis on the single man part since you're better off as a couple, as long as you both work and aren't childless.
posted by smackfu at 1:48 PM on May 16, 2012


So this guy Has A Problem about money.

Consider that he first racked up expenses that are ridiculous by anyone's standards - I mean, $15K per annum in entertainment expenses? I know people who live on less than that in New York City!

And then when he suddenly decides that he has to fix his debt: "I didn’t go home for Christmas, and I missed my friends’ bachelor parties and weddings."

How much did he save by not going home for Christmas? A thousand dollars? My parents have passed away, and I'd write a check for a hundred times as much if I could spend one more Christmas with them.

How long would it have delayed his repayment plan if he'd not blown off his friends and his family? Well, it took him 10 months to pay off his $100K+ debt - so "less than a month" is my guess.

Utterly wrong priorities. Not someone I'd want as a friend.
posted by lupus_yonderboy at 1:48 PM on May 16, 2012 [7 favorites]


A lot of people pass up Christmas with their families because it's too expensive, do you judge them too?
posted by smackfu at 1:51 PM on May 16, 2012 [2 favorites]


A lot of people pass up Christmas with their families because it's too expensive, do you judge them too?

Likely those people weren't blowing $1300/mo on "entertainment" just 6 months before Christmas.
posted by T.D. Strange at 1:57 PM on May 16, 2012 [2 favorites]


I just find it amusing that people are even criticizing how he stopped spending money. Haters got to hate.
posted by smackfu at 1:58 PM on May 16, 2012 [3 favorites]


This comes up a lot in life, I find, but it's important to note that "can't afford" and "don't want to spend" are two completely different things.

Passing up important milestone friend and family occasions of which there is not an infinite supply because you can't afford them is regrettable but understandable. Passing up these occasions because you don't feel like spending the money is more regrettable and less understandable.
posted by slkinsey at 1:59 PM on May 16, 2012 [3 favorites]


Passing up these occasions because you don't feel like spending the money is more regrettable and less understandable.

Unless you've chosen to only do it this once because you have set being debt-free in the shortest possible time as a goal for yourself.

Just as we wouldn't like it if he tried to lecture US about our spending habits, I doubt we come off well lecturing him about his.
posted by EmpressCallipygos at 2:01 PM on May 16, 2012 [2 favorites]


He talks a lot about how freeing it is to live frugally and how he doesn't think he'll go back to his previous lifestyle even though he doesn't have student loan repayments to make anymore (but also how the seasons played a role, e.g. it's easier to spend less in the Fall and Winter and more tempting in the Spring and Summer) (and also he still has a mortgage to repay). More than trying to impart practical advice, he's talking about playing a mental game and how he got more enjoyment out of figuring out ways to save money than he did from spending it.

I'd be all ready to jump all over this guy, because I think people who have wealth are obligated to spend/redistribute some of it, instead of just letting it accrue forever to the point where their money is making more money than most people make in wages... but he also talks about using his accrued wealth to quit his job and start "a humanitarian enterprise" in his 50s so, I guess I can't hate on him too much.

More than knowing how to properly manage money, what this guy knows is how to "game" his own mind so he can accomplish his goals even when he doesn't have some kind of external whip spurring him on. On that level I guess it's inspiring: if he can accomplish this, he can accomplish other things, and take more of a long-term view.

As far as his actual accomplishments, though: wealthy people living below their means isn't a moral accomplishment. You could even argue it's a immoral accomplishment, because it removes money from circulation. I hope he does something good with the money that's not going to HP, Apple, the banks, etc.
posted by subdee at 2:02 PM on May 16, 2012 [1 favorite]


I'd be all ready to jump all over this guy, because I think people who have wealth are obligated to spend/redistribute some of it, instead of just letting it accrue forever to the point where their money is making more money than most people make in wages.

Funny little fact, money doesn't grow unless you hand it off to someone else...
posted by pwnguin at 2:05 PM on May 16, 2012


And I thought about my own efforts in this direction, how I have spent the last four months saying "I will not go out to dinner or lunch this month"...and failed every month.

I'm with Davejay on this. The guy started out on third base obviously but he still made some pretty big sacrifices. I owe 5k, and somehow, it's not diminishing because of all of the small things that I am NOT doing. Or the small things I am buying.

It's not going to work for everyone, and it's not like "hey, everyone, why don't you pay off your $36k in student loans on your 26k job faster???" because as noted, the basic cost of living doesn't shrink proportionally to the smaller salary.

But as Davejay said, I'm just going to take my own take home message from it. Stop wasting money! (although I will still probably buy a coffee and bagel on way to work tomorrow, never learning. And living in NYC, even worse financial decision!)
posted by bquarters at 2:07 PM on May 16, 2012 [2 favorites]


Also, anyone who's already pissed off with the 1%-ness of it all, don't read the comments where it says 'he's only making 100 clicks (assume that means dollars) barely worth getting out of bed for'. I felt a little bit of blood boil there myself.
posted by bquarters at 2:09 PM on May 16, 2012


>>Passing up these occasions because you don't feel like spending the money is more regrettable and less understandable.

Unless you've chosen to only do it this once because you have set being debt-free in the shortest possible time as a goal for yourself.

Just as we wouldn't like it if he tried to lecture US about our spending habits, I doubt we come off well lecturing him about his.


Setting an arbitrary personal goal that means you won't spend important occasions like Christmas with your family or (hopefully) once-in-a-lifetime moments like weddings with your friends for a year represents a selfish personal choice, and one which doesn't reflect well on him as a son and a friend. If I were getting married and a good friend of mine told me that he could afford to attend my wedding, but wouldn't be because he chose to prioritize paying off his student loans a month earlier... well, he wouldn't be such a good friend of mine after that.

But why stop there, right? Suppose he decided he could pay down his loans a month earlier if he canceled his phone service and internet accounts, meaning that he wouldn't even communicate with his parents for a year in the service of his goal. Is that laudable or deplorable? It's only just this once! And after all, what's the chance something would happen to his parents in a year, right?
posted by slkinsey at 2:14 PM on May 16, 2012


I followed this guy from when he first started blogging on this topic. The thing that drove me crazy about his approach was his complete disregard for any freelancing position that was not completely structure by someone else. This guy has an MBA from Harvard--he should be able to start a business in his sleep--and he was afraid of just putting an ad on Craigslist to start tutoring kids, or offering some of his business acumen to others for a hefty sum. He only wanted to tutor if it was through Kaplan or start a business (that went nowhere) where he only did the manual labor.

I would never hire this guy for his MBA skills. To sneak drinks into a bar for me? Maybe.
posted by chiefthe at 2:14 PM on May 16, 2012


I probably should hasten to point out that I think the lifestyle changes he was willing to make to pay down his debt load were admirable. We should all have such discipline. I just think he took it a bit far when it came to sacrificing his personal and familial relationships.
posted by slkinsey at 2:16 PM on May 16, 2012


"My mom says that God had a hand in all of it."

""There but for the grace of God go I."
posted by hypotheticole

You do realise that the phrase is from Bunyan's Billy Pilgrim, and is about predestination?

"Back-of-the-envelope, 15-second math using the most basic assumptions indicates that I’ll have $1M in savings by the time I’m 49. I can retire and live frugally off the interest and/or get a more meaningful job. "


Yeah that right there says it all.

"I believe life becomes optimized somewhere between an extremely frugal state and a financially wreckless state; a happy medium exists somewhere between spending and saving money."

No fucking shit. Jesus this guy is a tosser of the highest order.
posted by marienbad at 2:17 PM on May 16, 2012


Just for those wondering about what kind of life he could have. As a single guy with no kids, I have a nice life on significantly less than $3000/month (after taxes, deductions, retirement, and student loans), and I live the Bigger City Nearby.

On about $2000/month I:

- live alone, inside the loop, a 10 minutes bus ride from work,
- have a car,
- feed my dogmonster and myself regularly,
- eat out about once a week or so,
- experience more than my fair share of the excellent culture and events this city offers,
- have internet service,
- a Netflix account,
- renter's/car insurance,
- a gym membership,
- pay for my iPhone as well as my sister's and
- VERY rarely pass up an invitation to go do things.

Living in Texas (and Houston, specifically) is INCREDIBLY affordable.
posted by jph at 2:17 PM on May 16, 2012 [1 favorite]


"I’ll admit that luck also had a lot to do with it–I didn’t experience any major or even minor disasters over the past seven months. My car did get randomly towed and–unrelated–a couple of old moving violations came back to haunt me, but on the whole, unanticipated expenses were minimal. My house and all of its appliances behaved themselves, my car never needed a major repair, I stayed employed, and I didn’t get sick or injured which could have resulted in an expensive hospital bill. Life didn’t really throw me any serious curveballs. My mom says that God had a hand in all of it."

I'll say that I'm interested in reading more of his blog. Nothing wrong with being disciplined and living within your means and spending down debt when you have the wherewithal to do so. But he admits here that "luck also had a lot to do with it." What's so hard to understand about that?

Especially for you all who are mocking the people who aren't quite so lucky. Basically, it's a version of the same argument that Romney uses on the campaign trail. Ask your mom and pop for cash, start a business, raid some corporation -- sure, then, and only then, you'll be able to pay off your astronomical $100k+ in student loan debt. But, you know, good luck with that. Which brings us back to this gentleman's original statement:

Luck also had a lot to do with it!
posted by blucevalo at 2:17 PM on May 16, 2012 [1 favorite]


Also, I agree with EmpressCalypigos' point that this will no doubt be spouted by right-wing republicans soon. God you can just hear the speech right now.
posted by marienbad at 2:20 PM on May 16, 2012


Living in Texas (and Houston, specifically) is INCREDIBLY affordable.

Texas (as well as Florida) also does not have laws entitling creditors to garnish wages or take your house away from you. Texas also doesn't have state personal income tax. So, yeah, living in Texas helps.
posted by blucevalo at 2:22 PM on May 16, 2012 [1 favorite]


Cmon now, howm I sposed to make it rain on less than $1,300/month?? Completely unrealistic.
posted by LordSludge at 2:25 PM on May 16, 2012


Reading many of the comments here I've been genuinely confused at the resentment so many people have for the writer. I couldn't understand why people can't look past the fact that he's in a better economic situation than they are and take his story at face value. Maybe even learn something to better themselves. The resentment seemed irrational to me.

But then I suddenly thought of a situation where I have what is probably an irrational resentment and suddenly had that aha moment. It reminds me of how I feel when actors and models go on about how great their diet and/or exercise plan is and how "anybody can do it". It's easy for them because they have the aid of expensive personal trainers and dieticians and have the financial career and incentive to motivate them. I never see one of those people and think "that's great that they got in shape, I could do the same thing". I end up cursing them and resenting their whole spiel as arrogant and out of touch with normal people.

I'm still glad I was turned onto this blog and will take some bits of his story and apply them to my own personal financial planning. But at least now I sort of get why there are so many comments totally dismissing him right off the bat. So if any you felt my eye-rolling at you - I'm sorry.
posted by Slack-a-gogo at 2:26 PM on May 16, 2012 [2 favorites]


Metafilter: Fine as frog hair, split three ways.
posted by yoga at 2:28 PM on May 16, 2012


On about $2000/month I:

- live alone, inside the loop, a 10 minutes bus ride from work,
- have a car,
- feed my dogmonster and myself regularly,
- eat out about once a week or so,
- experience more than my fair share of the excellent culture and events this city offers,
- have internet service,
- a Netflix account,
- renter's/car insurance,
- a gym membership,
- pay for my iPhone as well as my sister's and
- VERY rarely pass up an invitation to go do things.

Living in Texas (and Houston, specifically) is INCREDIBLY affordable.


This is all so incredibly dependent on where you live. For example, a $50,000 salary in Houston, TX equates to around a $120,000 salary if you live in NYC/Manhattan. So if you want to figure what your $2,000 a month would get you in NYC, imagine what it would be like living in Houston on 800 bucks a month.
posted by slkinsey at 2:31 PM on May 16, 2012


As John Scalzi would say, he's playing on easy mode. Doesn't take anything away from his accomplishments in life or in this instance, but the reactions should be colored by understanding the degree of difficulty.
posted by cell divide at 2:33 PM on May 16, 2012 [2 favorites]


This reminds me of one of my favorite AskMe questions: How can I convince my wife that living in a Yurt would be fun while I'm in medical school?
posted by dirigibleman at 2:36 PM on May 16, 2012 [5 favorites]


Metafilter: I should set up a Google docs spreadsheet.
posted by Windopaene at 2:41 PM on May 16, 2012


This is all so incredibly dependent on where you live. For example, a $50,000 salary in Houston, TX equates to around a $120,000 salary if you live in NYC/Manhattan. So if you want to figure what your $2,000 a month would get you in NYC, imagine what it would be like living in Houston on 800 bucks a month.

Yeah there is always the Manhattan scale factor. Wasn't it said that your (USA-based) happiness increases with an increase in pay up to $75,000....but in Manhattan the number was $137,000? (I was wondering why I've been so unhappy!)
posted by bquarters at 2:52 PM on May 16, 2012


slkinsey: " So if you want to figure what your $2,000 a month would get you in NYC"

Why are we trying to figure that?
posted by pwnguin at 2:52 PM on May 16, 2012 [1 favorite]


I made close to $100k for about two years once. In that time I paid off all my debts (some of which were in collections), bought a newish car mostly for cash. Bought a couple of new bicycles, a computer, a Canon 5d and all the lenses I wanted, etc., and saved up enough money to take a relaxing 8-month vacation when I quit. I also went on a few expensive holidays.

What I learned is this: there's a salary level beyond which you have to work hard to spend all the money you earn. If you're making close to $100k as a bachelor and your debt level is increasing, you are an idiot. This story is about a guy who realized that he was being an idiot and curtailed his idiotic behaviour. The consequences are natural and obvious.

People who make that kind of money (and more) usually don't realize how little consequence there is to a financial fuck-up. At that level you can misplace $5k and not really notice. This has two consequences: 1) they assume that people with less money should be equally resilient and attribute their lack of resilience to some sort of character flaw; 2) they have to screw up big-time to come to a crisis, and think of themselves as heroes when they manage to sort it out. Never mind that it's mind-blowingly easy to drag your ass out of debt when there's $6-7k (plus bonuses) magically appearing in your bank account every month, and mindblowingly stupid to mishandle it to the degree that you have a crisis in the first place.
posted by klanawa at 2:57 PM on May 16, 2012 [13 favorites]


vidur: "Sincere question: what kind of lifestyle can a single man have on $3000? Any mefites from the city where this guy lives?"

I made about $4500 total last year so, approximately $400 a month. (I even ended up paying income tax since it was all selfemployment) Here's how I did it: I own my own shack and food stamps. Of course, when my shit car died I didnt have money to replace it, so I'm borrowing my PhD advisors shit truck (no public transit in the rural area i live.) I'm paying $30 a week to buy groceries and commute to a pt job hich pays $200 a week. Yeah, i have a phd in mathematics and i'm on food stamps.

Here's what I didnt do: pay anything on my student loans. Maybe i should be blogging.


(oh and i cant move without abandoning my kids)
posted by ennui.bz at 2:57 PM on May 16, 2012 [3 favorites]


I disagree with the (implied) premise. Generating a big pile of cash by thrifty living is awesome. Spending that cash to pre-pay student loans is ridiculous. Student loans have low interest rates, that interest is deductible for people with middle-class incomes, and payment can be deferred in many circumstances when unemployed. "Cash is king" but only if you have it. This is especially true in tough times: you might be out of work, or a loved one, or if not other people are and that results in assets being for sale cheap for you to buy (if you have the cash!)
posted by MattD at 3:12 PM on May 16, 2012 [1 favorite]


I think I make about 2500-3000 a month after taxes, and in two years in richmond, va, I managed to pay back a few thousand in debt and saved up enough money that I'm going on vacation for a few months, while buying way more apple stuff than I probably should have. With an apartment downtown and going out to eat pretty much daily. Free internet, no cable and not having credit card debt or a car payment and living five minutes from the office helps a lot. Also not having kids and not drinking.
posted by empath at 3:21 PM on May 16, 2012


I got the impression that blogging, for him, was a way of sticking to a difficult plan by making it public and by being held accountable to "readers". It seems to have worked.

Perhaps instead of arguing about how poor he has to be to make this a feat worth respecting, you could identify something learn-able from his experience: that behavior change thrives with a set of public circumstances, daily milestones, a sense of progress, constant reflection, etc.
posted by jkolko at 3:22 PM on May 16, 2012 [1 favorite]


I'm unimpressed. Living at all costs a certain amount of money. The more you make in excess of that the easier it is to have money left over for things like rapidly digging out of debt and investing. A couple years ago I made 42K a year. I spent relatively little and managed to save something like 7 thousand a year. Pretty good all told. I recently moved onto a new job where I make about 70K a year I don't suddenly have kids. I can easily save 30K a year.

If I made 100K I could save 50K a year, The normal way to do things is to spend almost all your money no matter how much money you make. If you make more money you get a bigger nicer house and a bigger nicer car because you have more money. You specify your liquor when you order a drink at a place where the drinks cost more because the other people are wearing expensive clothes too.

But all the extra is optional, the baseline is not. Food, clothing, shelter. In order to save money at 30K you are out of low hanging fruit. You can save maybe 60 dollars a month walking two miles to work every day instead of riding the bus. When you make six figures you can cut 60 dollars by ordering take out once or twice instead of going to a fancy restaurant. Being rich and living like you aren't rich is psychologically challenging (maybe) but it requires very little in the way of sacrifice, ingenuity, or even inconvenience. I'm surprised that more people don't do it but I'm very reluctant to give people credit for pulling of the trick of simply not gilding their cages.
posted by I Foody at 3:31 PM on May 16, 2012 [6 favorites]


My first reaction was "$1300/month in entertainment? I would LOVE to see $1300/month. In total. Period. What an ass."

And, "$1300 on entertainment? Where's the $1300 for charity? Even I give to charity and I'm struggling!"

But as I read through and read comments, I came across this comment:

And I thought about my own efforts in this direction, how I have spent the last four months saying "I will not go out to dinner or lunch this month"...and failed every month...


and it hit me like a ton of bricks. He's right. Absolutely right.

I was born poor, I grew up poor, I'm less poor now but definitely not rich. Maybe, thanks to MasterCard, I'm lower-middle class. I'll probably die poor, too.

When I was a kid, we never had enough food or a car or new clothes or enough to pay the rent or enough food. We had two favourite days that came around every month. One was the day when we somehow had money. That was the day that we got to go Buy the Month's Groceries, that we got to have pizza or Chinese food and we all went to bed full. That was the day that nobody fought and the tv and the phone worked (if we had them). We'd all be happy. Sometimes we'd even get to go shopping. The other day was Food Day, when my stepdad would go away somewhere and come back with boxes of food. Some good stuff, like bread and peanut butter and pasta, and some weird shit like dented cans of cranberry sauce and damaged boxes of breadcrumbs. That was usually a pretty good day too. We all went to bed full.

The rest of the days of the month were- well- not so great. Especially the days when we were hungry enough to try and eat the cranberry sauce and breadcrumbs and stale bread-and-mayo sandwiches. Let me tell you, friends, that shit is not food. Those days we were all at each others' throats. If something bad was going to happen, well, that's when it would happen.

Later, when I was a teenager and I lived on the streets, things were kind of rough. But if I was panhandling and someone gave me a $20, I could go to a diner and buy a big fat juicy burger, and a whole pile of fries, and as many free refills of coke as I wanted, and a piece of pie with whipped cream, and still have something in my pocket for tomorrow. And I could sit in there as long as I could make the meal last, so if it was cold outside, or some man was hassling me, or someone had pissed in the spot where I usually slept, it didn't matter. The waitresses were always real nice to me. Sometimes, if I ordered something, and another diner left some food on their plate, they'd let me have it. I always felt good that I got to leave a tip for those nice ladies. They never looked at me funny.

I guess that because of that, I got this idea that going shopping, or buying food, was somehow related to being safe. And so, when I first got a Real Job, I shopped. I bought food and clothes and shampoo and toilet paper and laundry soap. Not just the basic food. GOOD food. Cartons of milk, as much milk as I could drink. Fresh bread, GOOD bread. Green fresh veggies. Crisp little asparagus. Shiny red peppers. Juicy plump tomatoes. Fat pink chicken breasts splayed out on white trays, glistening.

New clothes. Brand new clothes, clothes that no one else had ever worn. Stiff blue jeans with no holes, without worn seams, that were actually in my size. My shoes got a hole in them? No problem! I could buy a new pair!

But I never learned to eat this fancy food I bought or had time to cook it. I wanted it, but I wasn't used to it. I didn't really know what to do with it. I understood the theory of cooking, but it seemed like a crazy amount of work, and I wasn't good at it. Plus, I never knew what to make. I was used to people cooking food for me at shelters or else going hungry. It mostly just went bad in the fridge. But that was ok, because I had MONEY. I could just order pizza! I could buy lunch with everyone else. I didn't know how to take proper care of my nice new clothes, but it didn't matter because I could just buy NEW ones if they got damaged. I could do anything! I was safe all the time!

So when the hours got cut at my Real Job, do you think I was going to go back to the way things were? I was used to living this way. It was comfortable. It was safe. It didn't matter if my hours were reduced. I had a MasterCard. I had habits that were set in stone; poverty habits.

I've been worried for the past while about where next months' rent is coming from. I had to spend money for school, and I got myself into a payday-loan, student loan, MasterCard debt mess. Yet, in spite of this, I don't seem able to stop "buying food". I don't mean the basics; ramen and potatoes. I mean having lunch with coworkers, having a bad day and buying $15 worth of cookies, donuts and etc, I mean getting a new skirt from Value Village that I don't really need, I mean handing out money to panhandlers when I can't make my rent, I mean going shopping or out eating and leaving a big tio when I'm lonely and the whole world is mean because the waitressess and salesladies are always so nice. Because all of these things make me feel safe, and the more trouble I get in, the safer I want to feel.


So yes, it's unfair that this guy is starting out from a place that allows him to spend $1300/month on entertainment and I can barely make ends meet. Yes, if I had a few spare vehicles lying around, I'd probably sell them off. Yes, this guy is incredibly lucky, and it's not fair, blah blah blah.

But, at the same time, I think that because of my lack of self control, because of my self-comforting behaviour, because of this addiction to being comfortable, it's entirely possible that maybe, had I the same monetary advantage, I would still end up in the position that I find myself in now.

I once read that if money was just about numbers, it would be easy, but money isn't about numbers, it's about emotions, and that's why it's hard. And I imagine that to sacrifice your lifestyle, publicly, in front of all of your MBA Harvard friends, must be incredibly difficult. So I think there is something to be learned, for me at least, even though I'm broke as shit. And it's not about buckling down and working hard, but it is about forgoing my own comfort and staying strong in doing that. So good for him. Who knows what shit he had to battle with himself to get where he is.
posted by windykites at 3:31 PM on May 16, 2012 [37 favorites]


This guy lives in Austin, BTW. Not NYC. $3000 a month is a pretty reasonable, professional-class existence in Texas. I'm really surprised that, with selling a car and his motorcycle, he had to stop eating out and buying drinks entirely and stop visiting friends and family to get down to $3000 a month. I guess it's good that he's learned how to budget.

My two-person household's total month expenditures, including a mortgage, a car loan, student loans, short- and long-term savings, and eating out quite a bit on the weekends is about $4000 a month.

Maybe he has a bad mortgage.
posted by muddgirl at 3:35 PM on May 16, 2012 [1 favorite]


why bother announcing your displeasure in this thread?

because it's presented here in such a way as to make it seem interesting, but it's fairly unremarkable given his situation, isn't it? A single, unattached person with a high salary can pay down huge debts quickly by cutting back on certain unnecessary lifestyle expenses. Was it not kind of a foregone conclusion?
posted by Hoopo at 3:45 PM on May 16, 2012 [3 favorites]


Hoopo: because it's presented here in such a way as to make it seem interesting, but it's fairly unremarkable given his situation, isn't it? A single, unattached person with a high salary can pay down huge debts quickly by cutting back on certain unnecessary lifestyle expenses. Was it not kind of a foregone conclusion?


Given the number of people that aren't doing it, it seems like you've answered your own question.
posted by jkolko at 3:48 PM on May 16, 2012 [1 favorite]


Given the number of people that aren't doing it

But why should people in Mihalic's situation do what he did? As stated above, student loan debt is a very particular form of debt. He wasn't living above his means before he decided to pay off his student loans. In fact, he was almost certainly already living below his means, considering he was saving for retirement and other things. So he went from living below his means to living well below his means. Good for him, I guess.
posted by muddgirl at 3:52 PM on May 16, 2012


Why not just lie and say you got a Harvard MBA? No debt and you can use the huge increase in salary to pay legal fees if you get sued. I mean its not like you could become the CEO of a major company by just making stuff up.
posted by Damienmce at 4:05 PM on May 16, 2012 [1 favorite]


So no kids I presume
posted by mattoxic at 4:17 PM on May 16, 2012


A single, unattached person with a high salary can pay down huge debts quickly by cutting back on certain unnecessary lifestyle expenses. Was it not kind of a foregone conclusion?

He did way more than cut down expenses. He rented rooms in his house, took on additional jobs (pedicab? Really?), sold a lot of possessions. Speaking from my own experience, these are things that sound easy in theory but actually following through is hard.
posted by sevenyearlurk at 4:21 PM on May 16, 2012 [1 favorite]


chiefthe: "I followed this guy from when he first started blogging on this topic. The thing that drove me crazy about his approach was his complete disregard for any freelancing position that was not completely structure[d] by someone else."

MBA stands for "Master's in Business Administration" and focuses on the administration of existing businesses in the big middle-aged, steady-state part of their lifecycles. If anything, the MBA probably predisposed him to eschew new ventures in favor of companies that were already established.

But also remember that his goal was to increase his income for just a few months, well short of the ramp-up time for a new venture. All of his second-jobs seem well optimized for generating immediate cash. I can't comment on landscaping because I know nothing about that, but as a tutor myself I do know that signing up with an established tutoring company like Kaplan gets you a fast track through the early, painful parts of a tutoring service where you're spending more time searching for clients than teaching them. The same goes for signing up with an established modelling agency. Pedi-cabbing, even though it didn't work out for him, also gives immediate cash. You don't need a relationship with your pedi-cab passengers; you take their money now and say good bye.
posted by d. z. wang at 4:26 PM on May 16, 2012


So for a whole 214 days he stopped going out with friends, ate in and lived with a couple of roommates? That isn't deprivation -- that's a half-season reality show.
posted by JackFlash at 4:39 PM on May 16, 2012 [2 favorites]


He did way more than cut down expenses. He rented rooms in his house, took on additional jobs (pedicab? Really?), sold a lot of possessions.

He gave up on the pedicab after two days. And the stuff he sold was the extra car, the motorcycle, his road bike and accessories for the motorcycle and the road bike.

Most of the money he throws at the debt does seem to come from the roomates, cutting his entertainment budget, and getting a performance bonus. I clicked through a few of his entries and I'm glad people are finding something valuable in his efforts, but it's definitely not for me.
posted by Snarl Furillo at 4:41 PM on May 16, 2012


But why should people in Mihalic's situation do what he did? As stated above, student loan debt is a very particular form of debt. He wasn't living above his means before he decided to pay off his student loans. In fact, he was almost certainly already living below his means, considering he was saving for retirement and other things. So he went from living below his means to living well below his means. Good for him, I guess.

I guess I have the opposite reaction -- why don't more people in a similar situation do this? Not having debt (even "good debt," like student loans) is incredibly freeing. You can take low-paid or volunteer positions that are rewarding in other ways or that open opportunities later, you can travel more easily, and you have more free cash every month to do, well, other things. And without the debt, you have a lot more insulation from something like a job loss or a drop in your income, or any of the other things that he was lucky enough to not have to deal with that year, like illness or a family crisis.

I've never earned his level of income, and I've never had his level of debt. But I have made what were, for me at the time, fairly significant sacrifices to pay off what debt I had as fast as I could. So what he did makes sense to me. The mechanisms for how you would go about it are very different at higher and lower incomes, but there are at least a few commonalities.
posted by Forktine at 5:02 PM on May 16, 2012


Part of the problem here is the assumption that it's a good thing for society if he pays off his debts rather then spending money. That's not really true at all. It's good for him if he prefers living debt free rather then having fun, but other then that it may not even be good for him personally, so long has his income is secure, which, for a Harvard MBA it should be.
This privilege talk is getting really really old.

There are many students (socially, financially) like this guy who will find his blog to be an inspirational and practical guide to become debt free. But no, unless you're 99%/working class/poor/starving/dead you are privileged and an obvious target for snark.
Eh, I agree it's getting a little overused, but this is a pretty good example, though. The problem is, if you're not having trouble making your interest payments, there isn't any actual benefit to living debt free for most people, other then security.

Living debt free is great if you're uncertain about your future. But if you're sure to be getting a steady income, it makes sense to have some debt, depending on the interest rates. And student loans are some of the cheapest debt you can get.

If you have $100k in debt at 3% interest, and you have $100k you can invest and earn back 5-10% interest, guaranteed, it would actually be stupid to use the $100k to pay back the loan rather then take the investment. On top of that, student loan interest is tax deductible. Hello.

The big problem, though is that this 'anti-debt' attitude has taken over the national economic debate. The situation is even worse for the country as a whole.
And there's 1/6th of his solution already. Reduce the 10% 401k to 5% for a year and sell a car and you are done. -- DU
See, that's a perfect example of how "debt phobia" can cause people to make bad economic decisions. Depending on the return on his 401k and the interest on his loans, he could end up with more money 30 or 40 years from now by putting money into his 401k and making minimum payments on his student loans.

Again it depends, and it's slightly more risky, but in general it isn't an obviously good idea to chose loan payments over investment.
Why did he need a blog, let alone an MBA from Harvard, to do this?
Without the MBA from Harvard, he would not have had the debt to pay off in the first place. Duh.
Why the criticism of anyone, no matter how much money they make, taking on a challenge to live especially frugally to meet a goal?

Shouldn't we approve of behavior like this?
Not really. That $1300/month on entertainment pays for entertainment jobs. Not just Hollywood types, but probably waiters, waitresses, bartenders, hookers, and so on. Taking that money and paying back student loans doesn't really benefit anyone other then himself. For the economy as a whole it's better if you spend your money. Saving money benefits yourself so encouraging it isn't good for society as a whole, especially when you're talking about rich people anyway. If they can afford to spend money on things, it's better for everyone if they do, rather then horde it.

However, renting his second rooms probably helped some people out.
Part of the reason this blog (and to a certain extent similar discussions about stuff like law school debt) bothers me is that it moves the conversation about student debt to well-compensated business professionals with post-graduate degrees
There are a lot of people who went to law school in the past few years and are definitely not making a lot of money today.
I get the GRAR, I really do, but I'd rather live in a world where people making a lot of money prevent the big banks from leeching more interest money out of the general population.
I don't know about for Harvard MBA, but for the most part student loan debt is owed to the government, not big banks.
posted by delmoi at 5:16 PM on May 16, 2012


I looked and looked in my couch cushions, but I just couldn't find the $25K that I'm pretty sure I left there.

Maybe I'll go look again.
posted by no relation at 5:28 PM on May 16, 2012 [1 favorite]


Ummm...okayyyy...
Privilege has its advantages, I guess.


Don't hate. Appreciate.
posted by BigSky at 5:58 PM on May 16, 2012


What is his next project? "I bought a 1,000,000$ house and awe shucks I think I can pay it off in two years easily."

Please write a self help.
posted by Napierzaza at 6:03 PM on May 16, 2012 [1 favorite]


delmoi: "On top of that, student loan interest is tax deductible. Hello. "

Actually, that deduction phases out for MAGIs above between 60k and 75k, and is capped at 2500 in interest. Moreover, it's ridiculus how student loans are currently priced. The govt borrows at at ten year tenor for 1.76 percent, which is basically 0 or negative when adjusted for inflation. Charging students 6.8 percent is crazy talk, regardless of your stance on student loans or tuition prices. For a specific personal situation, it's possible repaying student loans are a better investment than broad index funds.

Saving money benefits yourself so encouraging it isn't good for society as a whole, especially when you're talking about rich people anyway.

Saving (investing) and spending are economically indistinguishable in most occasions. It seems silly to argue the rich should buy a second home instead of depositing their money in a bank to lend out for someone else to buy their first.
posted by pwnguin at 6:09 PM on May 16, 2012 [1 favorite]


Saving (investing) and spending are economically indistinguishable in most occasions. It seems silly to argue the rich should buy a second home instead of depositing their money in a bank to lend out for someone else to buy their first.
This economy, with 8% unemployment, near-zero core inflation, and negative real rates on federal funds, is not "most occasions." Spending a lot of money on "entertainment" (which, looking at his charts, looked to mostly be going to bars, restaurants, and movies) leads to more folks getting jobs in foodservice and bartending, as well as building the bars and restaurants.

Regardless of what it meant for the economy, it did make sense for him to pay down his student loans quickly, however. Not so quickly as to miss out on 401(k) match, but the interest wasn't deductible at his income, and there's no guaranteed 5-10% interest available on anything in this market. Stocks may return that in the long run, but that's in no way guaranteed. US Treasury securities, which are as close to guaranteed as you can get in this world, have a negative real rate of return.

But he wasn't even trying particularly hard to save money, seeing as he was still paying for haircuts, had an $85/mo. cell phone plan, and was making all his own food yet still paying $10/day for groceries. He could have saved on car insurance if he didn't have a terrible driving record, as well.
posted by akgerber at 6:25 PM on May 16, 2012


I admit to being a little bewildered by this initial comment:
"But no, unless you're 99%/working class/poor/starving/dead you are privileged and an obvious target for snark

And putting the others aside, that 99% just LEAPED out at me.
I mean, well, yes?
If someone in the top 1% of a particular subgroup, talks about the harrows and hardships of getting just a little bit higher, then, er, that's obviously not exactly as inspiring as someone down the bottom end of things?
I mean, Darkstar - paying off $12k on $25, that is pretty damn impressive!

Regardless of the income, I'm a little surprised this made mefi, because there's about, oh, a zillion blogs on the same topic?
And even this ahem, "really obscure" radio show called the Dave Ramsay Show, where people ring up multiple times a week, detailing the similar, or far more magnified sacrifices they made in order to pay off debt, along with books, and classes, suggesting all the same moves he has made.
It actually looks a hell of a lot like the Dave Ramsey plan, down to stopping paying the 401k while he was paying debt, and getting quite fanatical about it for the short term.

Still, yay for people who learn to live within their means!
posted by Elysum at 7:35 PM on May 16, 2012 [1 favorite]


Don't have an MBA, much less from Harvard, but was in a similar situation about 2 years back with considerably ... different, numbers. Had been repaying my education loan for about five years to that point, and was frustrated to see that there still was a substantial amount that needed to be repaid. Decided I'd go in for the jugular; was more of an emotional, than rational, response to be honest, and started putting everything into this: tried to cutback on expenses, and pump stuff in. I learned five things from that exercise:

a) While the sweet scent of freedom when you see the outstanding amount go to zero is liberating, but like everything in the world that's money-related, it's ultimately fleeting; at least in my case, I still had to save up for my wedding and family-life and so on.

b) Scaling down a lifestyle is significantly harder than scaling up a lifestyle. This is a cliche, but true; for instance, to take a completely unrelated and hopefully benign example, I find it very very hard now to stay in shared dorms, as opposed to single rooms, even though I spent a significant amount of my early twenties sleeping / living in such places.

c) The hardest part of a scale-down exercise is socializing. It's extremely difficult to try and save while wanting to hang out with your buddies who have no similar goals to reduce spending; at least in my case, it has led to me drifting away from a certain friend circle. So I have much respect for anyone who's tried it and succeeded in any way possible; I know I've failed at keeping my social circle constant (which is not necessarily a bad thing, as you'll see in the next point)

d) Related, but the biggest change I've seen in people post-MBA is actually their personal lifestyle; friends whose idea of a good time would be to spend a Saturday night en boite in a neighbourhood pub now don't think twice about heading to Macau or Phuket or some exotic destination to play at the casino or golf or snorkel or something. (So the anecdotes about Harvard MBA's splurging crazy rings extremely true for me).

e) Finally, and this directly addresses the blog in question here, but whenever you discuss money matters with anyone, you should always try to make it a qualitative discussion. The moment you bring numbers into the talk, people will take it personally and start placing you in bubbles, thereby cheapening the value of your experiences.
posted by the cydonian at 7:55 PM on May 16, 2012 [2 favorites]


I mean, Darkstar - paying off $12k on $25, that is pretty damn impressive!

It has been 20 years ago, so I don't know if the numbers would work today. But basically, as I can recall, here's my budget at the time:

25,000 gross - about 12% effective overall tax rate = $22,000 take-home
/12 months = $1833/month take-home

Monthly expenses:
$1000 to debt reduction
$833 to living expenses.

That $833 went toward:
$380 room rental (sharing a rental house with three other guys)
$65 my share of utilities (electricity, water, cable, telephone)
$60 car insurance
$70 gas ($50 for my car and $20 for roommate's, with whom I occasionally carpooled)
$120 food (yes, you could eat okay on $4/day if you planned well, took box lunches to work and seldom ate out)
$40 entertainment (a nice meal or two and maybe a movie once per month - no bars, no booze, no coffees, etc.!)
$100 misc, including clothes, toiletries, haircuts, household supplies and the occasional treat.
Thankfully, medical insurance was covered through work.

Once a year, I'd get back a few hundred bucks from my tax refund and could set that aside for any unforeseen expense that might arise (car repairs, trip to see family). I spent most of my spare time sitting at home hanging out with roomies, reading, watching tv and playing computer games. Fortunately, in a household of four guys, there was a lot of social interaction, so I never really felt deprived for entertainment/social interaction and was never really tempted to go hang out at bars (the biggest cause of wasted money in my earlier days).

I will say that, having been relatively poor before I got the job, it was a lot easier to maintain lower expectations of opulence in my lifestyle. And I'd still had an aversion to buying anything new if I could get it for free or on loan. Bought my clothes at Ross and Target if I needed it new (e.g., socks, underwear).

Even so, I could only do all this in a very narrow window of my life because I was single, healthy and childless, with few other family obligations. I lived this for about three years until I got a better job and was able to retire the rest of my debt in short order. (After which, I went WAY deeper in debt when I bought my house!)
posted by darkstar at 8:05 PM on May 16, 2012 [2 favorites]


Oh, I should mention: I was a closeted gay guy at the time, so I had no interest in dating. A big help in saving money. :)

Serious dating, I find, can be an extreme drain on finances!
posted by darkstar at 8:11 PM on May 16, 2012 [1 favorite]


Dell still exists?
posted by bardic at 9:12 PM on May 16, 2012 [1 favorite]


windykites: "I once read that if money was just about numbers, it would be easy, but money isn't about numbers, it's about emotions, and that's why it's hard. And I imagine that to sacrifice your lifestyle, publicly, in front of all of your MBA Harvard friends, must be incredibly difficult. So I think there is something to be learned, for me at least, even though I'm broke as shit. And it's not about buckling down and working hard, but it is about forgoing my own comfort and staying strong in doing that. So good for him. Who knows what shit he had to battle with himself to get where he is."

THIS. That's why I get so uncomfortable when things like "privilege", "born on the third base" and "playing the game on easy mode" are dropped in such a cavalier manner around here. Yes, there's always someone who has it easier than you. But believe me, he also has his crosses to bear.
posted by gertzedek at 9:24 PM on May 16, 2012 [3 favorites]


Yes, there's always someone who has it easier than you. But believe me, he also has his crosses to bear.

White man's burden.
posted by Blazecock Pileon at 11:20 PM on May 16, 2012


You know, as someone who had to borrow gas money just to get to work today, I actually do find this blot to be very inspiring. As in, I'm inspired to figure out a way to earn craploads of money. $1300 on monthly "entertainment" sounds like something I'd enjoy tremendously.
posted by Xandar at 12:23 AM on May 17, 2012


*blog
posted by Xandar at 12:24 AM on May 17, 2012


So no kids I presume
posted by mattoxic at 4:17 PM on 5/16


What's the finance rate on those suckers?
posted by discopolo at 10:04 AM on May 17, 2012


So no kids I presume

So didn't even read the full FPP, let alone any links, I presume.
posted by jacalata at 11:50 AM on May 17, 2012 [1 favorite]


Given the number of people that aren't doing it, it seems like you've answered your own question.

I have? How? I know exactly why people aren't doing it: they aren't making as much money as him, and if they are it's unnecessarily over-the-top. It's not prescriptive or practical. I mean, yeah, and I could probably pay my down my debts twice as fast if I slept in shelters and ate only tuna, onions, and mac & cheese for a year. What's the lesson here? If you make lots of money and spend a lot less money than you do now you can pay down debts fast? WOAH, slow down there, perfesser! By any account his debt was manageable on his salary in the first place. There was no need for him to take such extreme measures; if he had done it in 2 years instead of 10 months he might have been able to enjoy a meal out with friends once in a while and still pay it down relatively quickly. Or maybe he could go to his friend's wedding. Like a reasonable person.

He did way more than cut down expenses. He rented rooms in his house, took on additional jobs (pedicab? Really?), sold a lot of possessions.

He's a single guy with at least a 3-bedroom house, a second car, and a motorcycle. "Unnecessary living expenses" covers selling an extra car and a motorcycle and renting a couple of rooms. The story is "rich bachelor lives more like average bachelor for a year, has lots of extra money to pay down debt". Living with roommates and only 1 car in a house he owns!!!!! Is he crazy?!?! How did he do it? Find out more on Joe Mihalic's blog!
posted by Hoopo at 2:08 PM on May 17, 2012 [5 favorites]


Heheh, I have to say, I was amused that the lion's share of his sacrifice strategy was:

1. Use $25k "sitting around" in savings
2. Use $8k from "getting bonus"
3. Use $5k from "getting raise"
4. Use $5k from renting out extra rooms in his house
5. Sell second car and motorbike
6. Cut down to a barely civilized $500/month entertainment budget
7. Stop contributing to his employer-matched (!) 401k (wtf?)

I mean, to consider this an example of sacrificial budgeting raises it to Romneyesque levels of detachment from the financial reality that most folks deal with.

But good on him that he was able to pull himself up by his bootstraps, etc. It will, undoubtedly, ease the emotional strain of making his first million by 49.
posted by darkstar at 2:54 PM on May 17, 2012 [5 favorites]


The author of this article should get with the 29 year-old who can't find a good first job for a "most inexplicably hated by MeFi" party.
posted by Apocryphon at 3:26 PM on May 17, 2012 [4 favorites]


'm really surprised that, with selling a car and his motorcycle, he had to stop eating out and buying drinks entirely and stop visiting friends and family to get down to $3000 a month.

This. What on earth is he still spending $3000/month on? I've never had more money than that and I definitely went out to eat, went to friends' weddings, etc.
posted by naoko at 3:34 PM on May 17, 2012


Like I said, bad mortgage and bad car loan? 3 bedroom houses in Austin can be around $300k, so a 6% interest rate with no money down (hence, PMI) would make his monthly payment around 2.5k (with estimated taxes and insurance).
posted by muddgirl at 3:43 PM on May 17, 2012 [1 favorite]


What's his mortgage and monthly payment?
posted by mrgrimm at 4:39 PM on May 17, 2012


He breaks down his expenses in this post. He says the mortgage is $1500/month.
posted by Snarl Furillo at 5:46 PM on May 17, 2012


Unless you're literally keeping money in your mattress or in a hole in the ground, money you have touched stays in the economy. If you keep it in a savings account, it's part of a fractional reserve that allows your credit union or bank to give out loans. If you keep it in investments, it represents some capital that someone is using to (you hope) do something useful. If you spend it on a luxury yacht, it goes to the person who runs the yacht company (and then some goes to a taxing institution).

If you use it to pay off debt, it isn't magically gone either - someone else who'd been holding a note promising, say, the principal of $80k in student loan debt plus interest, now gets $80k plus interest instead. They have some money they didn't have before. They probably won't keep it in their mattress or in a hole in the ground either. When someone pays their debt off early, you don't get all the interest you thought you would, but you still get the principal plus, usually, something.

You can hate on the institutions this guy chooses to support with his spending - douchey Austin bars, gas, gyms, the meat industry, etc. But I don't think it's a valid criticism to say that by spending his discretionary income on paying off his debt rather than spending more of it on that stuff is depriving the economy of that money. It is almost certainly taking his money out of the local economy in Austin, but that's not the same thing.
posted by yomimono at 7:40 AM on May 18, 2012 [2 favorites]


Here's my story. I graduated in 1994 with about $20K in student loan debt. My first job paid $7.15/hr and I paid my minimal monthly payments (~$180/mo.) for 3 years, after which I had saved up $3,000, bought a car for $4,000 (decent down payment and (~$200/mo. payments for a few years), and moved out to San Francisco ... where I lived on my brother's couch for free for three months and eventually found a part-time (20 hr/week) job paying $35/hr.

Even I can do that math (extra $1,800 gross each month), and even with rent x2, I paid off my car and remaining student debt within the next year (during of course which the part-time job became full-time at a comparable rate, making everything even easier (when that extra $1,800 became an extra $4,900 per month!). 1997-1999 was a good time to be a production monkey.)

The moral: People, you too can be debt free. The solution is simple. Just make more money!
posted by mrgrimm at 11:09 AM on May 18, 2012 [1 favorite]


« Older "I started from the top and worked my way down." -...   |   The Weight of a Nation Newer »


This thread has been archived and is closed to new comments