Recently in Happiness Category

Most people live beyond their means because they want to feel and be perceived as being wealthy.  A Coach handbag or Mercedes-Benz sedan screams, "hey, look at me I can spend money and feel good about it!"  Feeling good about buying stuff or a particular type of high-end lifestyle is not inherently a bad thing, afterall we all want to live well and be exposed to nice things (even your most extreme cheapskate feels this way - it's not a Western thing or a by-product of materialism, but rather just human nature).  However, there is a trick to feeling "wealthy" but not hopping on the luxury purchase bandwagon; that is, concentrate on items and things that don't have a high premium or cost of entry.  So, for example, purchasing a luxury car or watch requires a large sum of money yet purchasing high end foods, although still a bit expensive, does not have the same high cost of entry.  My parents, for example, have never driven a luxury car, worn designer clothing, or lived in a highbrow neighborhood, though they spend a considerable amount of money on quality food each week.  Eating well provides my parents with their own "luxury lifestyle" at a fraction of the price of most "luxury goods."   

I've adopted the same mentality in terms of food and I often splurge on organic meats, vegetables, and fruit.  I also aim to buy fresh fish each week and enjoy quality cheeses, breads, and wine.  Spending a bit more on food and wine each week makes me (and my family) feel as though I am living a good, high quality, life.  And the bonus is that I'm not overextending my weekly budget or taking on any debt to buy my free range whole chicken or bottle of Southern Italian red.  

So, try cutting back on obvious luxury buys like jewelry, cars, clothing, shoes, electronics, products that require a monthly fee, etc. and go high end on items that do not have a high price of entry.  For our family, as I've said, that luxury item is food/wine.  Specifically, here are some things that we buy each week that provide us with a luxurious lifestyle:

1. Organic fruits and vegetables (whatever is in season)
2. Freshly baked bread
3. Free range eggs (they taste better, really!)
4. Fresh, wild, fish
5. Free range, whole, chicken (which we have our butcher cut into parts for us)
6. Whole bean coffee (which we grind, per use, at home)
7. Organic grains
8. Pasta imported from Italy (so much better than stuff made in the US)
9. Italian tuna in olive oil (you'll never buy Starkist again!)
10. Freshly cured olives
11. Various cheeses from around the world
12. Italian Olive Oil
13. Wine (including the homemade variety)
14. Fresh herbs
15. Dark chocolate

In sum, don't be afraid to spend money on things that make you feel special (if you can truly afford the item) because life can quickly become bland and pointless without true, day to day, happiness.   I do have a couple of caveats, however, before you treat yourself to some practical luxuries: 1., you should have no debt outside your mortgage, 2., you should have a 6-9 month emergency cash fund, 3., you should be fully invested in your company retirement plan (401K, 403b, etc.) and 4., you should have a few outside investments in your retirement portfolio (index funds, mutual funds, bonds, exchange traded notes, etc.)

They say that money can't buy happiness and I certainly agree.  However, did you ever stop to think about what money can, indeed, buy? 

Here is a list of ten things that money can help you buy:

1.  Money can buy peace of mind.  Do you have trouble sleeping at night because you are worried about bills or your current job status?  Well having enough money in the bank to not worry about your job for a year or two will let you sleep like a baby.

2.  Money can buy you comfort.  Do you live in a small cramped apartment with two kids and neighbors above you constantly screaming?  Money can allow you to put a 20 percent down payment on a comfortable, quiet, home in a safe neighborhood.

3.  Money can buy you a reliable and safe car.  Do you drive a late model vehicle that is constantly breaking down or in need of monthly maintenance?  Is your vehicle equipped with anti-lock brakes, stability control, and at the least 4-6 airbags?  Money can allow you to buy a quality used (or new) vehicle from a reliable manufacturer.

4.  Money can buy you a future.  Would you like to not work and live well at some future point?  If the answer is yes, then money will let you prepare for a future without a boss and making income without working.  In short, you can use money to buy stock, mutual funds, index funds, CDs, etc.

5. Money can buy you confidence.  Do you swallow your pride and work for an organization or boss that you do not respect or just plain hate?  Well, if you have money in a bank account money can give you the courage to walk away from a bad situation and start fresh.

6. Money can buy you the ability to give.  Do you wish you could help a not so well off sister or brother or contribute to your local Red Cross?  Well, money can help you be more charitable and giving.

7.  Money can buy you time.  Do you often find yourself wishing you could spend more time exercising, reading, learning to cook, traveling, spending time with family, et. al. ?  Retiring early by way of making the right financial moves in life can give you the time to do the above.

8.  Money can buy you nice food.  Do you clip coupons to the point that you will not buy something you are craving?  Do you buy sub par ingredients and generic store brands even when you know quality is poor?  Money can help enjoy great meals (including wine).

9.  Money can buy you experiences.  Do you not travel because you're worried about airline fares and hotel prices?  Do you decide often against a trip into the city to enjoy the opera and a glass of champagne?  Money can help you expand your mind and bring you places beyond the town you were born in.

10.  Money can buy you opportunity.  Do you wish you could buy a home in today's economic environment because interest rates are low and home prices have been dramatically reduced?  Do you wish you could buy GE stock because it's under $20 and inevitably will rebound to record highs in the near future?  Money can help you leverage opportunities that would normally not be able available in ordinary times

There's something about Warren Buffett that makes me feel warm and tingly all over and it's not his net worth of $62 billion!  Rather it's a combination of his personality, habits, and life philosophy.   I first saw Warren Buffett on Charlie Rose (he and Charlie are very good friends) and become captivated with him from the get go (I remember thinking, how could this affable and happy Midwestern man be the world's richest person?).

Recently, I've started reading a new biography on Buffet by Alice Schroeder entitled, The Snowball: Warren Buffett and the Business of Life.  Schroeder was an insurance analyst that covered Berkshire Hathaway (Buffett's company that basically buys other companies) and she got to know Buffett well over a number of years, so they collaborated on a rather bulky biography.  Reading through the first couple of chapters got me thinking: if Buffett leads a frugal and thrifty life then why in the world isn't every other person in this country not living like him?  Buffett's habits and life philosophy are classic "Millionaire (or in his case, Billionaire) Next Door"; here's a little about how he lives his life:

Many of the best personal finance blogs I read on a daily basis, including Get Rich Slowy (which Money Magazine called the most inspiring money blog today), The Simple Dollar, Free Money Finance, and Money, Matter, and More Musings focus on how to save money or lead a frugal life, however we often hear via the media that the US economy is tanking and that increased consumer, business, and government spending will be the only way back to more prosperous times.  The logic is that some group needs to spend in order for the economy to grow, or with the current economic crisis, stabilize.  And when consumers don't spend money on cars and LCD TVs (because of lack of funds or because they are simply being conservative) and corporations don't sign big contracts for services or equipment, the US economy grinds to a halt.

Every time I travel to Europe (especially outside of the big cities) I notice that the stress level tends to be much lower than what we have here in the US (regardless of city or town).  Yes, big city folks tend to always be on edge (think of the typical New Yorker), but I've found folks from New Hampshire to Michigan and from Florida to Missouri to posses as much stress, albeit at a different level, than the typical city dweller. 

The whole thing got me thinking, can one really live a practical and cost conscious life if stress is present?  I'm not talking about occasional stress that is associated with a job or family, rather I'm talking about the constant stress that keeps you up at night or prevents you from enjoying the weekends or a nice meal.  

I used to work a pretty stressful job in a competitive industry and after a day at the office I didn't want to handle any of the practical living things I've been blogging about on Scordo.com; in fact, at the end of day all I wanted was a glass of wine and some food (preferably the kind that I didn't have to make myself).  Now, removed from the hyper-competitive industry and working a more sane job, I find time to cook, read, work on the house, and be with my family (all at the level that I want).