Rich Slick over at Get Rich Slick has a rebuttal to my post yesterday. To continue the debate, here’s a rebuttal to his rebuttal…
1) By “that dollar will be taxed”, I mean that a dollar saved is dollar in your net worth. A dollar earned could be only 72 cents in your net worth. Trust me, I want to pay a ton of taxes. I’d like to pay 1M or more in taxes a year.
2) Yes there are risks to everything, but saving a dollar is not a risk. So the capitalist takes a risk, while the frugalist typically doesn’t. Yes, risk is a fact of life, but there are degrees of risk.
3) It’s the “without too much concern for the price or cost of an item” that leads to over-extending oneself. Yes, it’s not a guarantee, but it’s a risk of not concerning oneself with the costs of things. The frugalist doesn’t run this risk.
4) The “wasteful nature” that I was talking about was related to buying new cars with the idea of helping the economy. Meanwhile perfectly good cars go into landfills.
5) Yes we agree that a car isn’t an investment. I realize the phrase “depreciating investment” is an oxymoron, but it’s common vernacular to say, “I invested in new shoes today.” If this missed you then… (sigh and shrugs shoulders). Would you have preferred, “A frugualist doesn’t waste money on new cars and uses it to make more money?”
6) Do you want to teach me? Ben Franklin said a penny saved is a penny earned. Perhaps this could be a post in and of itself. I would really like to understand the math behind it.
7) For each Bill Gates how many people have filed for bankruptcy? Millions and millions? What if you just took $100 and played roulette hoping for black (or red) to come up 15 times in a row. I’m guessing you’d throw away a lot of $100 chips, but if you get it right you’ll have over $3M. Or you could just invest your life savings in some penny stocks. Do it wisely and you’ll join those names Rich Slick mentioned.
In the end, Rich Slick makes the perfect argument I was intending to make from the outset. Warren Buffet and Sam Walton were frugalists AND capitalists. Of course they didn’t make their billions by being frugal, but they are examples of how it is possible to be both.
Did I make a lot of assumptions about capitalists? Indeed. Did Rich Slick make a lot of assumptions about frugalists? Indeed.