Would You Rather Be A Millionaire 100 Years Ago Or Middle Class Today?

millionaire 100 years agoInflation has slowly been eroding the buying power of the dollar.

100 years ago, being a millionaire would have been a huge deal but today being a millionaire might not even allow you to live a comfortable retirement.

Even with the effects of inflation, I’d still rather be in the middle class today than be a millionaire 100 years ago.

Would you?

Why I’d Rather Be Middle Class Today

There are so many things that I couldn’t even possibly list them all. However, here are some of the big ones.

We Live More Comfortable Lives

Today our lives are much more comfortable than for those who lived 100 years ago.

Our homes are climate controlled with air conditioning systems and heating systems that are extremely efficient. We even have heating and air conditioning in our cars. Shopping for food, or anything else for that matter, is so much easier than it was 100 years ago.

We have fancy beds that allow us to sleep comfortably. We have fun kitchen gadgets that make cooking easier. We have clothes washers, clothes dryers and dishwashers that have changed tasks that were once very time consuming to tasks that were very simple.

Even if I was a millionaire 100 years ago, I wouldn’t be able to live with all of these wonderful luxuries we have available to us today. That’d be a shame.

Yes, I could pay someone else to do my laundry, dishes and cooking, but I wouldn’t have the access to drive halfway across the country in a day. The interstate system hadn’t even been implemented yet!

We Live Longer

We live longer, healthier lives today than anyone would have ever thought possible just 100 years ago. Many diseases that once were death sentences can now be cured with a simple medication. Healthcare has advanced to allow even those with chronic illnesses to lead a somewhat regular life.

I wouldn’t want to live longer unless I had a high quality of life, but even those in their 90’s often live very fulfilling lives today. That would have been nearly impossible 100 years ago, even if I was a millionaire. I wouldn’t trade away my life simply to be rich.

Technology Has Advanced Beyond Anyone’s Wildest Dreams

After living with the technology we have today, it’d be really, really hard to imagine living 100 years ago. Forget smartphones and the internet, computers hadn’t even been anywhere near being invented. There was no TV, not that TV greatly enriches our lives. Just these few technologies make us richer than those who lived 100 years before us.

The fact that I can go to Google and search how to fix my home easily saves me hundreds of dollars a year. While these technologies haven’t made me a millionaire yet, they easily could. In fact, I make money every month through these technologies in ways that would have never been thought of 100 years ago.

Some Things Are Cheaper Than Ever

While the value of the dollar has decreased over the years, on an inflation adjusted basis, some things are cheaper than they ever have been before.

For instance, shopping at the grocery store is cheaper than it was 100 years ago on many items. The same can be said for movie tickets, gas (although that depends on if gas prices stay as low as they currently are) and most clothing.

Overall, I’d say we have it pretty good today even if we are only in the middle class and we’re not millionaires. I wouldn’t trade the luxuries I have today for a million dollars 100 years ago. I’d be going so far backwards I’d have no clue what to do!

Would you rather live 100 years ago and be a millionaire? Or would you rather be a millionaire today? Heck, I wouldn’t even trade not being a millionaire today for being a millionaire 100 years ago, but maybe that’s just me. Leave your thoughts in the comments!

Should We Buy That 70″ TV We Want Oh So Badly Or Wait?

When we painted our living room a few months ago, we moved our furniture toward the middle of the room to paint. When we did that, we noticed that our TV looked bigger when we were sitting closer to it. Novel concept, I know.

The thing is, when our furniture was moved toward the middle of the room, we were reminded how our TV looked in our old, smaller living room.

We moved into our new home over a year ago and the living room in our new home is much larger. Now that the furniture is moved back to its normal arrangement our TV looks much smaller.

The question we’ve been battling with is, should we get a larger TV to fit our new living room or should we wait until we’ve accomplished some of our other goals first? First I’ll explain our other goals, then we’ll discuss the TV situation a bit more.

Goals We Want To Accomplish (In Addition To An Awesome 70″ TV)

So we have a big goal we’re trying to accomplish right now. We’re trying to fund our imergency fund (investment emergency fund), which is an extension of our emergency fund. We currently already have a 6 month emergency fund in cash (actually, a high yield online savings account) but we wanted to feel a bit more secure and have a bit more money on hand.

The problem is, we didn’t want all of that in cash due to inflationary forces slowly eroding the value of our cash. Instead, we decided to put the second part of our emergency fund, our imergency fund, into investments. We decided we wanted another 6 months of expenses in our imgergency fund so this will support us for months 7-12. 

Eventually the imergency fund will grow beyond six months of investments, but for now that is our initial goal. We’ve been able to fund 3.5 to 4 months of our new goal, but still have 2 to 2.5 months worth to invest. There is no rush finish our imergency fund, but we think we’ll be able to complete our goal by the end of 2014 if we don’t make any major purchases, like that sweet 70″ TV.

What We’ve Already Accomplished This Year

We’ve already accomplished two pretty major financial goals this year. The first goal was to finish paying off my wife’s $80,000 of student loan debt which we finished up in early Spring of this year. We were super stoked to finally get rid of the student loan debt and free up some major cash flow every month.

The second major goal we’ve accomplished is fully funding our 6 month cash emergency fund that I’ve already mentioned. We didn’t have to fill this up from $0 since we kept a decent emergency fund while paying off my wife’s student loan debt. However, we did still have to save a few more months of expenses to fill the fund to its intended level.

We feel like these are two pretty major accomplishments this year, but just because we’ve accomplished two big goals doesn’t mean we should splurge on a 70″ TV, does it?

Is A 70″ TV Really Necessary?

No, a 70″ TV is never necessary… ever. We know this is clearly a want and nowhere near a need, but we’re allowed to have some fun with our money, right? The 70″ TV’s we’ve looked at are right around $1,500 and honestly, I think that’s probably a bit much for a TV.

In all likelihood, we’d probably get a 60″ or 65″ TV that comes in at under $1,000, but a 70″ just looks so amazing and so much bigger! It should be clear we haven’t decided on which TV we want yet. There’s a good reason for that.

If We Buy A Massive TV, We’re Hoping We Get A Massive Deal

We don’t plan on buying this TV on a whim, which should be apparent. Instead, we’re going to do some research, wait for the right time and hopefully get an amazing deal IF we decided to buy a bigger TV.

I’m thinking there should be some pretty awesome TV deals around Black Friday or Cyber Monday. Maybe we’ll luck out and get a good deal then. If not, we’ll just wait for a deal we can’t pass up.

Or Should We Buy An Experience Instead Of A Thing?

It’s been said that people enjoy experiences more than things, and in general I agree. We could spend the $800-$1,500 toward an experience, like another cruise, instead of getting a TV. However, I think a TV does somewhat count as an experience. TV shows and movies provide countless hours of entertainment which could be considered an experience much like going to the movies would be.

So Do You Think We Should Get A Massive TV?

So what do you think? Do you think we should go ahead and get a massive TV now and satisfy our want immediately? Do you think we should wait until Black Friday or Cyber Monday? Or do you think we should just pass up the bigger TV altogether and focus on our 7-12 month imergency fund first?

Don’t tell me I should cancel cable though, we’re not doing that! We’re keeping cable, so that means we will always need a TV to watch our wonderful cable programming, even if we do have to call to get our bill lowered every 6 months.

Let me know what you think! Should we get the TV or not? I read every comment, so we’ll definitely take your opinion into account!

How Much Do You Spend On Halloween? It’s Right Around The Corner!

Halloween is just a short month away! While it isn’t my favorite holiday, I know a ton of people who would say Halloween is their favorite holiday. We’re pretty simple when it comes to Halloween because we don’t have any kids, but some families go all out and spend a ton of money to prepare for Halloween.

According to National Retail Federation, last year 7 in 10 Americans planned to celebrate Halloween and the average American was expected to spend $79.82 on decorations, costumes and candy. That’s not per family. That’s $79.82 per PERSON!

Halloween Decorations Can Be Expensive!

Halloween decorations come in all shapes, sizes and forms. There are simple decorations like the Jack-O-Lantern that you carve yourself and then there are completely over the top decorations like a two car garage that has been transformed into a haunted house.

As far as our decorations go, we normally have a couple of props we’ve gathered over the years and maybe a Jack-O-Lantern or two in our front entryway. Of course, if you want to get cheap Halloween decorations, wait until the day after Halloween and pick up what you wanted at a very discounted price.

Halloween Costumes Aren’t Cheap Either

The local mall has already had a Halloween store open for a few weeks and it isn’t even October yet. They sell all sorts of Halloween themed items, but I’d say about 80% of the items they sell are costumes and accessories to costumes.

The prices varied greatly but the average costume was over $50. There were some crazy over the top costumes there were a couple hundred dollars too!

One thing that surprised me was the fact that most of the costumes in the Halloween store were adult costumes, rather than children’s costumes. I always considered Halloween more of a kid’s holiday, but over the last few years it seems more and more adults get into Halloween. Then again, maybe I’m just getting older and realizing that it has always been an adult holiday too.

If you’re running on a tight budget this year, remember that you can normally come up with a pretty cheap Halloween costume from the things you have around your home. You might have to be a bit creative, but I’m sure you can come up with something good!

Do You Give Out Candy?

According to the NRF survey, 96% of people participating in Halloween would be buying candy to hand out to children last year. That’s a lot of candy, and I love me some candy! How much you spend on candy for Halloween totally depends on which type of candy you prefer to hand out to children.

If you’re going to be giving out bite-site or individually wrapped chocolates, be prepared to spend a ton of cash! However, if you go with my Halloween staple of Dum Dum pops, it won’t be nearly as expensive.

The other main factor in candy cost is where you live. If you live in a neighborhood with a lot of kids, you’ll have to buy a ton of candy. However, if you live off the beaten path like I have the last couple of years, you might only need to buy one bag!

Even with only one bag I still had a ton of left over candy last year. However, this year we live in a big neighborhood and I have feeling I’ll have to get a couple more bags of candy if I don’t want to run out.

How Much Will You Spend On Halloween This Year?

How much will you be spending on Halloween this year? Do you plan on buying decorations, dressing up in a costume or handing candy out to children?

What Would You Do?: You Won $100, $500 or $1,000 Today!

I was listening to the radio on my drive home (in my paid off car, of course) just last week and heard an interesting advertisement for a contest the radio station was running. If you called in at a certain time you could win a chance to win (not straight out winning) a trip to Germany, a trip to Orlando or $500 cash. They then played a sound bite of someone freaking out when they won a $500 cash prize from a previous contest.

Since I have won multiple radio contests in the past, I wondered what I’d do if I won the same contest. At one time in my life, I might have been that person. I might have freaked out and been screaming, jumping up and down with joy, because I had an extra $500 to my name. Today it wouldn’t be the same story though. $500 wouldn’t change my life.

Why Winning $500 Wouldn’t Change My Life

Ok, so it would technically change my life, but not in any major way. The reason I’m confident that it wouldn’t change my life is because I’m on financially solid ground. I’m caught up or ahead on all of my bills. I have a decent emergency fund that I’m comfortable with. I’m not living paycheck to paycheck and we haven’t stretched our budget to the limits.

With all of those things nailed down pretty well, $500 just wouldn’t have a major affect on us. It wouldn’t catch us up on our rent to keep us in our home or give us $500 to pay off that nasty credit card balance. It wouldn’t turn our electric back on or prevent us from having our cars repossessed. So what would we do with an extra $500?

What I’d Do with an Extra $500

Sure, it’d be nice to have an extra $500 and, don’t get me wrong, I’d be happy about it. We’d like throw it toward my fiancee’s student loan debt and it would move our pay off date up a bit. Other than that, we could spend it on ourselves, but I doubt we’d find anything worth splurging for that would be more important that knocking the debt down.

What If I Won Only $100 Instead?

Then I got around to thinking, would I have changed what we’d do with the money we won if it was a smaller amount? What if I only won $100 on the radio contest? After giving it some thought, I decided I’d probably do the same thing and pay the student loan debt down. However, I’m guessing a lot of others would splurge with the smaller amount of money than with a larger amount like $500.

What If I Won Even More Money?

Naturally, because I considered a smaller amount, I wanted to consider a larger amount of money too. What if I won $1,000? Would that change how i dealt with the money that I won? I think at this point I actually would say yes, even though it seems a bit counter intuitive.

Instead of throwing it all towards the student loan debt, I think I’d set aside a small amount, such as $50, to splurge on a decent dinner out or something similar. Why? I don’t know exactly, but I feel like $500 wasn’t quite enough to take a small bit out of but, for whatever reason, $1,000 was big enough. Hey, at least I’m an honest PF Blogger!

The Ideal Thing To Do With Money You’ve Won

In my eyes, the ideal thing to do with money is to further yourself as much as you can. In most cases, this would mean treating the money like any other money you’d earn from your job or any other source. Put it toward your goals, whether that is paying down debt, contributing toward retirement or saving for the next big chapter of your life.

So, what would you do if you won $100 today? How about $500? $1,000? Would it change your life, or would it just be more money in the bank? Let me know! I’m interested to see everyone’s answers and their rationale for what they’d do with the money. Be honest! I don’t care what you do with it, I’m just more interested to see how everyone would react!

What Would You Do?: Spend Money to Save Money?

Welcome to the another edition of “What Would You Do?”! If you have a question and would like to know what others would do please contact me and I’ll keep it in mind for future editions of “What Would You Do?”. To see previous versions, check out the What Would You Do? archives here.

Today I have a question I think many people run into at many points in their lives. Should I spend money to save money? I’m not talking about buying something I don’t need to save money. I’m not the type of person to buy a shirt because it is 50% off even though Ialready have 25 other shirts.

Instead, I’m talking about making a couple changes to our house that will save us money down the road. These aren’t phantom savings because no matter what, I’ll have to incur these costs as long as I own the home. Instead of continuing to incur these costs as I am now, if I make a couple changes, I can dramatically lower these costs over the coming years! So what improvements am I considering?

Should I Buy a Heat Pump Water Heater?

Your first question probably has something to do with what a heat pump water heater is. Valid question, as I hadn’t heard of them until my home inspector mentioned them when we bought our house. Basically, a heat pump water heater works like an air conditioner heat pump would to heat your house in the winter. It takes heat out of the air and puts it into the water (rather than heating your house).

They’re the same size as a regular water heater but they’re much more efficient (hint: they use much less electricity). Did you know that besides heating and cooling your home, your water heater is the second biggest user of electricity?

The only addition is a drain line to take the condensation the heat pump makes out of the water heater area, much like an air conditioner has a drain line. There is one awesome side effect that a heat pump water heater provides. It will air condition my garage for me. How sweet is an air conditioned garage in the hot Florida summers? Pretty sweet.

Until the end of May, Lowe’s has a sale on heat pump water heaters for $1,000 ($200 off normal price). Before you freak out and say I’ll never recoup the cost I have some awesome news! My power company will give me a $700 rebate if I have a heat pump water heater installed. In addition to that, the federal government will give me a $300 energy efficiency tax rebate! Basically, I only have to pay $60-70 dollars in sales tax and for someone to install the heat pump water heater, which costs about the same as a regular water heater install.

I will have to front the money for the water heater and pay for the sales tax and install, but the savings for the energy efficiency should pay for the costs in 1 to 2 years max. My home inspector also mentioned I’d likely have to replace the water heater in the next 5 or so years so I’d have to eventually pay to have it replaced. It would lose the rest of the water heater’s useful life, but I’ll gain energy efficiency to pay for that loss.

What would you do? Would you get the heat pump water heater if you were me?

Should I Pay For an Irrigation Water Meter?

The other issue I have has to deal with water as well, just in a different sense. Where I live I can’t get well water for my sprinkler system so I unfortunately have to use city water. Currently I only have one water meter for our house which means the city can’t tell the difference between water I use in my house and water I use for my lawn. Why does it matter?

My city charges us for both water and sewage. Their are no sewer meters so they assume any water we use goes in the sewer. The problem with this line of thought is that the water I use for my sprinkler system doesn’t go through the sewer and I’m paying for it as if it does. Now I haven’t had a water bill yet that has included a lot of sprinkler system use, but the summers get hot here and sprinkler systems use a TON of water.

The problem I’m facing is whether or not I should pay for the city to install a second water meter just for my sprinkler system. The city said it shouldn’t cost more than $400, but $400 isn’t chump change. It could be less, but they won’t know until they come out. I’ll definitely save enough money to cover the cost eventually, but I don’t know if it will be one summer more like 3 years. I just don’t have the data. My neighbors said theirs paid for it self very quickly and they have a yard that is similar to mine in size.

I should mention that watering the yard isn’t really an option. If it doesn’t rain a lot we have to water to keep our yard up. I live in a neighborhood with an homeowner’s association so we have to keep our yards to a certain standard. I used to be against homeowners associations, but after seeing some of the neighborhoods around my area, we definitely don’t mind paying a small amount quarterly to keep our neighborhood and house values nice.

Would you wait and see how much money you’d potentially save each month, or would you go ahead and get on the list for the city to install an irrigation water meter? I know I’ll recoup the cost eventually, but I don’t know how fast.

So there you have it! Two water related questions in one What Would You Do? Both have the potential to save me a lot of money over the many years we’ll be living in our new home! What would you do?