I came across Madame Moneypenny, quite a while ago, then I read Mindful Money, and I listened to The Millionaires Next Door, and learned about the FIRE movement.
My mind was blown away. My whole money believe-system was shattered. In a good way. I used to believe that:
You had to be a millionaire in order to not have to work anymore.
Millionaires are people with enough money to buy everything they wanted.
Just like all those rich celebrities you see on TV with mansions, and watches, and houses, and islands, and whatever you can think of.
Well, in a sense that is still how it is. Just the math is a different one than the one I was using all those years:
It depends on what it actually is that you want to buy with your money.
You have to figure out how much money you genuinely need in order to maintain the life you want without working.
Of course, all those celebrities still exist, but some do go bankrupt. And according to all those surveys from the 90s, The Millionaire Next Door books write about, „normal“ looking people who live very frugally, and have been working hard their whole lives, and never lived above their means, could very well have a net worth over a million.
I had to examine all my money believes, and disbelieves, and concepts, and attitudes. For example, having grown up in a socialist state, and later in a social market economy, I never worried about my retirement. Why would I? I didn’t even know how it worked to save for retirement. Once I did the math in my head of my yearly salary multiplied by the expected years I hope to live in retirement and chose to forget about it as quickly as possible. The amount was simply impossible. Now I learned that investment is key. You save to have a golden goose, and your retirement will be her eggs, which is the „extra“ money your investments generate. Of course, after taking taxes and inflation into consideration.
I never budgeted before I had my own family. I just spent all my money. Thanks to grandma it all worked out in the end. I never calculated how much money I actually spent, which inevitably leads to the questions of what I actually need to buy, and what I actually waste my money on.
I am currently listening to the book On Nostalgia by David Berry. He mentioned that in the 18th century when people had extra money, they would either save it for lean times or pay people to do their work for them. The concept of spending excess money on luxurious goods simply didn’t exist. Those needs were later created by the industry and the yearning of people for a higher social status.
Another mind-blow, isn’t it?