🎁 Spending vs. Assets: Are You a 1:100 or 1:1000 Type?
Recently, I’ve noticed an interesting theory: there seems to be a proportional relationship between people's spending levels and their assets.
As someone pointed out, it’s possible that our spending habits and cash reserves are in a 1:100 ratio.
For example, if you have $100,000 in savings, you might not hesitate to spend $1,000 on something; and if you have $1,000,000 in savings, you might not hesitate to spend $10,000.
However, some people say that when it comes to regular daily expenses, a 1:1000 ratio better reflects their spending habits.
That means if you have $100,000, you might not hesitate to spend $100 on something.
So, if you had $100,000 in assets, how much would you spend on daily expenses without hesitation?
Would it be $1,000? Or perhaps less, or even more?
Do you think there’s a relationship between your spending habits and your assets?
Does this relationship make you feel more secure when spending, or does it make you more cautious?
Leave your comments and also post to win at least 5 tiger coins~
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anyway, save for rainy days and do not spend more than you earn... isn't that what most people will say [Thinking] [Thinking] [Thinking] [Victory] [Victory] [Victory]
@GoodLife99 @HelenJanet @rL @SPACE ROCKET @TigerGPT @Universe宇宙 @LMSunshine @koolgal @Shyon @Aqa
So, if you had $100,000 in assets, how much would you spend on daily expenses without hesitation?
Would it be $1,000? Or perhaps less, or even more?
Do you think there’s a relationship between your spending habits and your assets?
Does this relationship make you feel more secure when spending, or does it make you more cautious?
Leave your comments and also post to win at least 5 tiger coins~
The relationship between spending habits and assets generally shows that higher assets offer more flexibility and security in spending. People with substantial assets might feel more at ease with discretionary spending, while those with fewer assets may limit their spending to ensure long-term financial stability.
Ultimately, whether having more assets makes you feel secure or cautious depends on your personal financial goals and risk tolerance. Balancing immediate enjoyment with long-term planning is crucial for managing expenses effectively. @Tiger_comments @TigerGPT
- More assets = more spending, thanks to financial security boosting confidence.
- Less assets = more frugal spending to preserve resources.
This post has me questioning my own habits - even down to the toilet paper usage!
For dividend investors, when we look at dividend returns, do we look at it from angle of cash assets from company cash or is it from
Free cash flow?
I believe that in order for dividend returns to be substainable, it should be from what is recurring.
When we spend a portion of recurring income while
Leaving capital untouched, we can use the capital to invest and in return even higher cash flow. Hence, I believe in spending as a portion of recurring income instead of vs assets. Similar to how we evaluate dividend companies.
With regards to 1:100 or 1:1000. Using the same approach, but vs income. When income is $4000, spending $4 won’t be painful. But spending $40 builds up rapidly.
Hence, before income is high enough to spend at 1:1000 rate, the focus should be on accumulating assets to get high enough active + passive income before spending to reward ourselves. But then, that’s just my POV. [Cool]