Today we will touch on the different lifestyles of personal finance. Another way to phrase this topic, what type of personal finance lifestyle do you lead? Do you know there are multiple lifestyles?

First Lifestyle – Optimizer

The first lifestyle we will discuss today is the “Optimizer” – So what exactly do we mean by the optimizer? The goal with this lifestyle is to get the most efficient or effective use of the funds or money available. Here are a few characteristics of the Optimizer lifestyle: detailed oriented, value oriented and concerned about money. The optimizer lifestyle is those individuals or households who are looking to maintain a high standard of living with moderate or cost efficient spending.

Typical lifestyle character traits are as follows:

• Spend less than you earn, pay off debt immediately – Over the long run, focus on running cash flow positive lifestyle.
• Beware of lifestyle inflation – Realize the gains in pay over the years can be used to improve financial status, not buying a bigger house, expensive trips or cars.
• Live in a modest home – As housing is the biggest expense in most households – The optimizer ensures that mortgage payments are within the recommended guidelines – Here’s How Much Mortgage You Can Actually Afford – Consumer Reports
• Pay yourself first – Focus on setting aside money for future retirement, car repairs, home repairs and the sort.
• Focus on debt freedom – Debt is used as a tool but not a lifestyle. Debt and leverage are not a focus.
• Growing wealth is a slow process – Realize a path to wealth takes time; no shortcuts or get rich quick schemes. Start with a plan, revise over time and stay consistent with investing.

Second Lifestyle – Ostrich

The second lifestyle we will discuss today is the “Ostrich” – So what exactly do we mean by the ostrich? The goal with this lifestyle is to continue with life, spending most of the money available. Here are a few characteristics of the Ostrich lifestyle: YOLO oriented, focus on living for today and not concerned about money. The ostrich lifestyle is those individuals or households who are looking to maintain a high standard of living with little or no regard to spending. They pay no attention to future impact of living for today and little to no regard for future consequences.

Typical lifestyle character traits are as follows:

• Focus on material possessions, spend what you earn and strive for more – Over the long run, focus on using debt and credit to build an externally wealthy running cash flow positive lifestyle.
• Focus on lifestyle inflation – Realize the gains in pay over the years can be used to improve financial status: buying a bigger house, expensive trips or cars.
• Live in an expensive home – Most large metropolitan areas have a corresponding cost of housing. People in the Ostrich category typically buy as much house as their income, bank or other lender affords.
• Focus on debt as a tool – Debt is used as a tool to afford a better lifestyle. Debt and leverage are key focus areas in order to afford more costly spending.
• Growing wealth is not a concern – Realize that the home ownership path as well as normal spending will take care of itself at retirement. Future paycheques are borrowed against, future pay increases are used to accommodate spending today.

Third Lifestyle – Gambler

The third lifestyle we will discuss today is the “Gambler” – So what exactly do we mean by the gambler? The goal with this lifestyle is to maximize the amount of money available. Here are a few characteristics of the Gambler lifestyle: also YOLO oriented, with focus on risking today to make a large payback; hyper concerned about making money. The gambler lifestyle is those individuals or households who are looking to make a high risk road though life. This is the current focus of the Reddit investing or momentum stock market crowd – Looking for 5X or 10X growth in a very short term.

Typical lifestyle character traits are as follows:

• Focus on striving for more – Over the long run, focus on very risky ways to build wealth. This is akin to gambling or risky investing.
• Focus on debt as a tool – Debt is used as a tool to afford a better lifestyle. Use debt and leverage to risk and potentially gain more wealth.
• Growing wealth is primary concern – Realize that the traditional path to wealth and normal spending is too slow. YOLO attitude and future paycheques are borrowed against, future pay increases are used to accommodate risky lifestyle.

Conclusion

We have presented three distinctive lifestyles of personal finance? Are there any we have missed? Please leave a comment below if you think so. For those presented above, we wanted to capture the extremes; likely you will see tendencies of each individual trait within yourself or your family. We are not saying that either of these is entirely bad within themselves (Optimizer, Ostrich, Gambler) and likely you will need a little of each in order to have a full lifestyle. There is a danger inherent in these traits that can lead to future and current financial hardship.

• Optimizer – Too much focus on tomorrow may make you miss opportunities for living life today!
• Ostrich – Too much focus on today, may leave you destitute in retirement!
• Gambler – Too much focus on risking all for striking it rich may leave you destitute today!

All of these are key aspects to consider within your financial framework. Thank you for visiting us today, stay safe and healthy.

Sincerely, The Lab Manager

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If you want to support our efforts at http://www.personalfinanceexperiment.com, please leave a comment, hit the like button and subscribe to the blog.

Also, if you like what you read – Please consider supporting us with a coffee – https://www.buymeacoffee.com/PFExperiment