Originally posted here on 04/01/2018. It's unedited.
Or, dollarydoos!
I often talk about money. Almost as often as I think about it. And the lovely humans I’m fortunate enough to have in my life will confirm these claims.
But this fixation on money seems somewhat different to the approach of those around me. You see — I don’t crave immense wealth or luxury or status symbols. They just don’t interest me. I have 0 emotional attachment to money itself.
But I do believe money buys freedom. Specifically, the ability to choose where you spend your time. And when. And how much of it you invest.
Sure — you can work x hours a week indefinitely, and all the (168-x) hours a week remaining are yours to spend how you wish. Minus the time spent commuting (y), the time spent playing catchup outside work hours (z), and the hours of investment required to advance in your career (a). Well, and the time you should be investing in sleep, too (s). Those (168-x-y-z-a-s) hours quickly whittle away, right? Not to mention that you’re probably pretty zonked out from full time work to properly appreciate those spare hours and use them for cool shit.
But if you had all your living expenses covered, you would probably choose to spend your time a little differently, right? Hell, you might even choose to go to work anyway because you love your job so damn much.
There’s a school of thought (or a few intersecting schools of thought) postulating that you don’t actually have to work your whole life — mandatorily at least. Labelled as frugality, financial independence, or even my personal favourite, moustachianism, the idea is that you work hard for anywhere between 10–25 years — depending on your circumstances — learn to live off a little bit less (which is still plenty), and put away the rest. You keep putting wealth away until one day, your annual passive income = your annual expenses. Now you are no longer forced to work, and you can do as you please with your time. Maybe you could even do something good for humanity?
Don’t believe me? Check out this post by Mr Money Moustache.
The premise is that we already have such rich, luxurious lives being in first world countries — this Casually Explained video puts it well, regarding how your life will turn out based on where you’re born (skip to 0:16s to see the map) — that you should really be able to have a stupidly comfortable life living on 30–70% of your income.
And I tend to agree. Is eating out an extra few times a week really worth adding a year or two to your working career ? Seriously, do a few calculations of different expenses over the course of 10–15 years. It’ll scare you. Just for shits and giggles, let’s take buying lunch every day at work as an example. Average cost of a meal in Melbourne is probably around $15. Multiply that number by 5 for each day of the working week. That’s $75. Then, assuming you’re working 48 weeks a year in the city, multiply that number by 48. $3600.
$3600 spent just on eating lunch out each work day. For a single year!
Hang on. It gets worse. Let’s look at a 25 year career. Which is pretty damn short by today’s standard, with preservation age set at 60. So you eat out every day at work for 25 years. This means you’ve spent $3600 * 25 = $90000.
This adds 4 years to your working career, assuming you can live a comfortable life on $22500 cash annually. Was it worth it?
Cut out a few expenses in your life, consumerist ones especially, and you’ll quickly see how much money you waste. Or hopefully, you used to.
Better yet, track every dollar you spend for a year and see where your money is actually going. There are a few apps that help with that. Pocketbook in Aus or Mint in the US. If you take anything from this article, it should be this. The epiphanies will follow if you just start to track what happens to your money — at scale.
I’m only one year into my career. And who knows what the future will hold with regard to job prospects, what I want to do with my time, or where I want to be. But at this point, I don’t want to spend my entire life trading hour by hour for material shit that won’t actually make me happy. So I’m stach’ing*. And I think you should too.
(*): In a future post, I’ll talk about what you could do with all this new found cash you have lying around — now that you’re not burning it