When do you spend your riches and what do you spend it on?


We are all talking about making money but at what point is it O. K. to spend your money? Do you wait until you retire? Do you keep saving it waiting for that day? Do you save for the items you want, etc…

And what are some of the things you spend your new wealth on once you have reached your goal?


I spend the cash from my rental properties every month (for food, house payment, snowboarding, i.e. all the essentials). However, I would not sell my rentals and blow that money, otherwise the monthly income would stop coming in.



I am assuming you don’t work a regular 9-5 job. When did you go from working 9-5 to only living off your unearned income?


Rental incoome is earned income. Alot of work going into buying a rental and maintaining it right.

As for me…I have a passion for Cj7’s and buy them and have them restored and resell for profit. I keep it for awhile and have fun with it of course.

I just bought a 1986 CJ7 for 4500 and put about 5K in it and within 2 weeks had it sold for $13300. So I made close to 4K in less than 2 months owning this car… Almost better t han a flip… Especially when you think of the ROI I made on it…and the fact that a CJ7 never goes down in value…

I didn’t spend a penny until I had $250K in cash, in the bank. It was a goal I set for myself. It didn’t take that long (3 years) Even then, I tried not to blow the small portion I did spend… For instance, around this time I found a really nice Porsche 911 Carrera being sold due to a divorce. Using what I had learned over the years buying houses I made the owner a low offer but explained to him tactfully, that I wasn’t trying to insult him, this was what I had to spend and that was it. I gave him my number and used the famous (my famous) “I understand it’s a low offer, but look at it like this…It’s all cash, and it’s sitting there if you need it, just call and I’ll be here same day” This guy swore he’d never sell this car for that amount. 2 weeks later he called and I purchased the car, I drove that car on nice days for 2 years. I sold it on ebay for $8000 more than I paid for it.

You can spend your money, just don’t FORGET what you learned while MAKING that money. I have lot’s of friends with very nice boats. Only ONE has purchased his boat like I bought that Porsche. He waited until the dead of winter and started looking at boats. He looked at 10, made LOW offers on all of them and ended up with a beautiful boat for half it’s value. He used it for 2 seasons and sold it at the beginning of summer for a pile more than he had spent on it.

The key to spending your money is DON’T BLOW IT. Use what you learned in your real estate investing to get what you want at a big discount and NEVER buy anything new. Let the first owner take the hit. Be patient, remember the fun is actually in the HUNT, not the kill.

The key is to buy things that are HIGHLY undervalued. Want a vacation home??? Go to Florida… If your offers aren’t pissing realtors off, their too high. LOWER THEM… Someone will bite. Then 10 years from now you can sell it to the next generation of nit wits who think just buying ANY real estate is a sure fire way to millions. Meanwhile you and your family enjoy that asset for 10 years and you actually make money on it in the end. Florida has a long way to fall in my opinion, but I have scored some INCREDIBLE deals on LAND down there. I love land in Florida because I don’t have to maintain it, I don’t have to insure it, nothing breaks on it, taxes are cheap for dirt, and someday my lot’s are going to command many 10’s of thousands more than I paid. There are a LOT of people who paid for 4 or 5 lots in a developement thinking they could just resell them a few months later at a big profit. Those folks are DIEING with this stuff, I make ridiculus offers and just wait…it’s a numbers game, a certain number of these people WILL take those offers. My current rate for Florida land??? 25 cents on the dollar!

Spending is okay, just don’t BLOW your money.

I really can’t tell what I spend my rental money on. I have a regular W-2 type job. I live way below the income I get from that job. The money for the real estate is just more money.

What I did is I took 3 bank statements from the last 3 months not the next 3 months but the last 3 months (that keeps me from acting in a way to reduce the numbers) and added up what I spent my money on. That gives you how much it takes for you to live. That number was about 1/2 of what my wife takes home. I make even more than she does. That means we had a lot of spare money anyway. If you are going to use real estate to live off of, you must do that excercise before you start. That tells you if you need to have $3,000/month or $10,000 month. That tells you if you need to buy 10 houses or 50 houses. But we don’t do it for the money we do it for the lifestyle. So if the lifestyle you have is breans and rice and you are still paycheck to paycheck then you need to figure out how much more you need to make to get the lifestyle you want and buy the real estate that gives you that.

But lifestyle questions I live an a 3,000 sqft house with a home theater and a pool. I have 3 cars (one of which is a sports car) and a lake house. I eat out every night go on vacation every year to places like Hawaii, or the carribean, and send my kid to camp every summer.


As usual, great post.


I just keep re-investing it. I diversify it into IRA funds, stock investments and other things. Eventually it will supplement my 401K retirement. God knws there won’t be any SS left by that time.

Of course there will always be social security. Social security is not an investment created by conservatives. It was created by tax and a spend liberals so it is a TAX and a SPEND. There is no politician born or will ever be born that will vote to end that expenditure. The problem with social security is not a financial problem it is a demographic problem. There are not enough people paying in to pay for those taking out. In other words we didn’t have enough children to pay for us when we retire.

The solution is all around us. Make the illegal aliens legal and take their taxes to pay for our old buts. Why do you think that none of the people running for president (or anybody with any sway in the government) will say they want to stop illegal aliens from coming. We need them to save social security.

Your comment may be closer to the truth than many are aware. Of course there will still be social security for those currently in the work force. The problem (as Bluemoon eloquently stated) is that there will be a time in the near future when the benefits paid out will exceed the revenue coming in.

If there is not a major tax increase, there will have to be a benefit cut as well as a freeze on future inflationary increases. I suspect our politicians will sit on the fence so long doing nothing, that their only recourse will be to do all three – raise taxes, suspend future cost of living increases, and cut benefits – to “save” social security for the next generation.

Inflation wil still erode our purchasing power. Freezing future SS increases, cutting benefits and tax increases just makes the percentage of our daily cost of living covered by social security income that much smaller, that much sooner. At the same time, there will be no curbs placed on future increases in the Medicare deduction from SS. With all these reforms, the senior citizen receiving $152 in a monthly SS benefit today, will still be receiving $152 ten years from now.

Ten years ago, $152 bought about 180 gallons of gas for the car. Today, $152 buys about 51 gallons of gas for the car. If oil hits $125 per barrel, $152 may only buy 35 gallons of gas for the car. When oil hits $200 per barrel, $152 will only buy 25 gallons of gas for the car.

As time goes on, the SS benefit’s contribution to the senior’s cost of living will become so small that SS will become insignificant to their lifestyle.

Legalizing all the illegal aliens is not enough. If the illegal alien population is only 12 - 20 million, there just is not enough of them to fix the problem with SS. The solution for all you young people in the county is to start having more babies. Increase the population more rapidly. Let’s have another baby boom. Then, when you young people are old enough to qualify for SS, there will be a larger workforce contributing to the SS system to pay for your benefits.

I think its best to not count on SS being there. If it is, it probably won’t be enough to do much. I think REI is a great plan for retirement. When your properties are paid off, you can just live off the income or tp into the equity (conservatvely) to finance your lifestyle. I like the idea of cashing out about 50% of all the paid off properties and let the tenants pay for it again…

I don’t count on anything that I don’t control. As I have said before I am not a spectator. I have a pension (just like the old times) that should pay me way more than I need to live on in retirement, but I am not counting on it either.

But everybody looks at social security as if it is a fund in itself like our IRAs or 401ks. It is not. It is a line item in the budget. For social security to go away it is like congress voting to not fund roads or something. It is just a cost of doing business.

Now for congress to get rid if the anchor dragging them under, what the Republicans tried to do was to “privatize” it. That way it could fail then they can say it was that bad greedy Merrill Lynch, or Chase that did it. We were duped by the bad capitalists. The Democrats rained on their parade by becoming the majority. If that doesn’t change then the Democrats will fix the demographic problem by increasing the work force to the point that it supports the retirees using illegal aliens.

So you are young and if you want social security to be there when you retire, vote Democrat (but be prepared to learn Spanish). If you don’t want social security to be there when you get old but a lot of drama (congressional hearings etc) vote Republican.

My only income is from my real estate, and I use the profits to live, to pursue my hobbies, and to travel.

I am currently doing my research so I can buy a snow bird home in a foreign country. But as fdjake explained, I will buy a good investment property for a good price and enjoy it for years. Then I will make a nice profit when (and if) I sell.

I don’t think you can actually retire as long as you have real estate. So if you are serious about retiring, you must cash out. Real estate must be maintained at a steady rate, tenants must be dealt woth, repairs must happen. That’s a job.

BlueMoon… how can you say having more kids will help SS fund. Problem is many companies are going overseas. This is taking jobs away from the US population. There are not enough jobs in the US for each individual . Getting rid of illegals will help as well. This will force companies to pay normal wages for a honest days work, which in turn will help support SSI fund.

I have nothing personally wrong with illegals, except the fact that they want to try and change everything to their culture here in the USA. Back in the 50,60,70’s when they came over, they learned the language and blended in with the people around them. They were not heavy sergated from the population and did not live in ghetto’s. (Now do we all know where the term GHetto came from because it really does not mean poor black neighborhood like we use it today). Now they come and want to change everything. I live in SoFl and when I goto Miami, its all spanish. Street signs, menus in fast food resturants, signs on the supermarket window, everywhere. Its not like your in the USA, I have to adopt to spanish language and culture there. Only good thing the latin communities brings to Florida are the hot and sexy 20-30yr old woman…

Back in 1950 when social security started there were 16 workers paying into the system for each retiree. It is now 3.3 and will get worse as more and more of the baby boomers start to retire. That is the demographic problem. If we add more workers (back to the 16 per retiree) problem solved. Politicians are not stupid. Why else do you think that they are not trying to get rid of these illegal aliens? We need them to fix our social security system. The cost is the change in US customs.

The cost of SS, Medicade/Medicare to fund the babyboomers is more than all the money in all the stock markets worldwide ( I forgot the actual amount). The bottom line. We can’t pay for it. When all the babyboomers are required to start withdrawing from their IRA’s at age 70. There’s going to be a huge dent in the stock market. The democrats will try to tax the rich more(if they can). But in reality, the rich will take their business and their jobs elsewhere or fnd other loopholes. The middle class will be forced to bear the burden as they always have. The current middle class is becoming the “new poor” very quickly. As far as SS being a line item or a cost of doing business, that line can and will be reduced to the point that it’s no longer viable. I think the govt. will continue to put bandaids on the problem until someone comes up with a viable plan or it just collapses. SS,Medicare and Medicaid were never meant to fund everone’s retirement and medical needs. The cost of healthcare alone is bankrupting medicaid. It will be nice if there’s something there, but I seriously doubt it. Where’s the money going to come from?

The key to spending your money is DON’T BLOW IT.

To put it lightly I’m a cheap/frugal person…I haven’t driven anything but a 4 cylinder in 15 years…I dont have any jewelry,fancy high price clothes,prized possessions etc…I found out my wife bought me an Oris watch and never thought it was expensive until a friend at work told me it was $1200 watch…I was shocked but my wife definitely enjoys the nicer things in life much more than me,but not too much more (she has her own career and does well so she can spend a few bucks if she likes)…The entire reason for me to ever make money was never to be a pimp…I do it for self gratification,I’m my worst critic…What I do like is my homes (primary residences)… I do spoil myself with things that make me money,that is my hobby,my passion…

I’m a life long waterman/surfer and if you want to count my 15 board quiver as material objects then I’m the Don Bishop of surfing…

I have this reoccurring dream like the Christmas Corona ad on TV…You know the one where they show the little hut next to a huge palm tree in the middle of nowhere,then all of a sudden the palm tree gets lit with lights…That’s going to be me,but a bigger hut :bobble

Here’s my take, just some facts and observations…

Ever notice how many of your subs speak Spanish as a first language now a days?? I have a friend who’s a mason. HE CANNOT HIRE AMERICAN KIDS for apprentices. He HAS TO hire Spanish speaking immigrants because NO ONE wants these jobs. Our kids are at home playing x box while these people are busting their @sses and LEARNING A TRADE. We send our kids to College because their to good for hard labor. Guess who’s going to be building your college graduates chimney/walkway and HOMES in 10 years?? (It’s OK because Junior took Spanish in College) The funny part of this is…these college kids will be signing on the dotted line for a gigantic mortgage inorder to buy a home from a guy who came to this country 15 years earlier and busted his @ss to become a developer. It’s happening RIGHT NOW!! One bulder I know came here 15 years ago LEGALLY from Guatamala. He now builds BIG MONEY homes. I laugh everytime I see him on site because HE makes more money than the PHD’s he’s selling million dollar homes to!!!

Latinos are THE FASTEST growing segment of our population.

These people are TAKING OVER the construction trades in this country, just look around at the next job site your on.

They become politically active in their communities (very smart.)

They start BUSINESSES.

They have obtained home ownership at a faster rate than any other immigrant group in history.

Here’s what we ALL have to realize…These people are HERE, no one is going to kick them out because they have become interwoven into our economy. The theory that if they left, WE would all go out and get jobs at $20/hour cutting lawns is ridiculus. I’m not cutting lawns, my son’s not cutting lawns (for a living.) They’re here, their building solid economic and political bases, they ARE creating wealth, and they will fuel the next big housing boom in this country.

The question becomes…how many of US will be set up to PROFIT from these changing demographics?? When Italians came to this country (LEGALLY) in the early 1900’s they brought with them construction experience (road building and heavy construction especially) They went on to do EXACTLY what these people will do. THEY BUILT BUSINESSES. The only people getting screwed here is US. Our Goverment OPENED THE DOORS for these people. It’s a JOKE, you can’t get a CUBAN CIGAR into this country yet there’s no prblem getting MILLIONS of illegal aliens here?? COME ON!!! OUR GOVERMENT let this happen to fill a labor shortage.

They’re not going back, they’re here to stay, get them INTO the system so they pay TAXES and USE that group as the economic engine they are becoming.

Having said that…I am FULLY aware that a large group of these people exploit our system for everything they can. THAT’S OUR FAULT. We elect idiots who allow laws to be passed that let that happen. CHANGE those LAWS, stop giving these people handouts and the freeloaders will leave when the meal tickets stop. The remaining people will be BRINGING something to our economy AND to their own FUTURES!

Does anyone donate to a charity?
or give money to your church?
What percentage is good? 5% of income? maybe 10%?
I am looking at the taxes we have to pay. If we don’t give some away we get hit with the full force of the tax department.

This is an awesome topic for discussion.
Great comments.

Well I give to church for reasons other than tax deductions. :slight_smile: But it’s not a bad side perk. I give 10% and then some extra.