“The New Frugality: How To Consume Less, Save More, and Live Better” by Chris Farrell


Chris Farrell’s “new frugality” refers to what many believe to be the end of over-the-top borrowing and spending as a result of the Great Recession. Many Americans and especially millennials are very hesitant to take out loans or credit cards. Farrell gives examples of strategies to help you both spend less and earn more.

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  • A greater appreciation for experiences rather than possessions has developed in all generations

  • NFMs are afraid of purchasing equities (stocks) in the same way the Greatest Generation was after the Great Depression
  • NFMs also embrace green approaches, synonymizing green living in frugality in ways that include: living in smaller houses, buying for quality not quantity, using public transportation, and community recycling of goods.
  • “New frugal” millennials (which I’ll call NFMs) adopt financial buffers like emergency savings funds and health insurance.
  • “We can’t pierce the fog of the future. It’s in the nature of the beast.”
  • A Roth IRA is a great margin of safety for emergency money
    • can be withdrawn in case of emergencies, but otherwise it almost always accrues much more interest than any savings account or bond
  • Common money pitfalls: credit card debt, not saving, borrowing too much, not having life insurance, ignoring the cost of fees
  • Fees reduce investment returns significantly
  • The earlier you start saving, the better chance you have of making good money
  • Borrow rarely and wisely

  • Make do with old computers, wait for things to actually break before you replace them
  • Turn down the thermostat and wear a sweater
  • Automate your savings
  • Use community sites like Freecycle or Frugal Village (many more listed in the book)

  • Invest in a “bond ladder”, with 1, 2, 3, and 5 year bonds. When each bond matures, buy another 5-year bold. This technique insulates your fixed-income liquid funds again variation in bond interest rates.
  • TIPS (Treasury Inflation-Protected Securities) are  a straightforward, risk-free way of creating a margin of safety against inflation.
    • Avoid income taxes on these by keeping them in an IRA or other tax-protected account
  • “Rules-of Thumb” Portfolio
    • The percentage of securities (bonds) in your portfolio should equal your age.
      • Note: This is a fairly old rule of thumb. Jack Bogle says you should subtract 10-15% from this number since people are living longer now.
    • 10-30% of your portfolio should be in international stock index funds
    • The rest of your portfolio should be in a broad-based index fund like the VTI or VOO
  • Never ever ever use borrowed money in the stock market

I did not read some sections about things like 529 accounts and homeowner’s insurance because they are not relevant to me at this point.




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