2017-09-16-19_36_17-the-shockingly-simple-math-behind-early-retirement-opera

Financial Independance through Bad Ass-ity

I’ve been thinking a lot about financial independence these days.

One thing that has spurred these thoughts is the two periods of annual leave I took in August. During this time I didn’t go abroad, I did not go hiking to Everest and neither did I stay out late, ending every night in a drunken stupor (I don’t drink anyway). I pretty much stayed in Hampshire enjoying the simple things like walking, cycling, catching up with friends, personal projects, the odd spot of eating out and the occasional trip to London.

It was kind of bitter-sweet towards the end of each annual leave because sometimes it felt like another week would be good. Not that I hate my job, far from it, the thing I like most about my work is the people I work with – a bunch of well-balanced, talented, friendly dudes.

All this got me thinking… what would I need to do to perpetually be on annual leave? eg. have an income from something that pays ALL my expenses and simply allows me to live a fairly simple life as described above?

A bit of Googling turned up the blog of Mr Money Moustache – also known as “MMM” or “Triple-M”. I urge you to check out his “Start Here” post but in a nutshell, his idea is pretty simple: by living frugally and saving 50% of your take home salary you can be financially independent in 10 years.

OK so there is a bit more to that. For instance, living frugally might not sound like fun to some of you reading this: What about the latest iPhone I want to buy? And that car I desire? Or the latest videogames? Or that all-expenses guided luxury vacation to Veneuzela?

Well, there is nothing that terribly wrong with those things. But MMM’s point is that those things do not necessarily bring you lasting happiness. They bring short term happiness definitely but as someone who has owned a nice, fast car after a short while it becomes “just another car” – it stops being special. Then you need to save up for another more expensive, faster, more polluting car in order to get the same buzz! The scales to many things such as phones all the way up to houses and private jets (!).

The things is, after absorbing some of his posts and listening to several interviews with him on YouTube (link below) – I feel I have arrived at some of his conclusions independently and know them to be true. I’m not financially independent though – MMM is well ahead of me on that front. He retired at age 31 and by all accounts has a very happy, fulfilled life with a wife and one child all living at under $25,000 a year (that is about £18,560 in UK money).

So what do I mean by “arrived at some of his conclusions independently”? Well, here are some things I do that are in tune with the “Moustachian Way of Life” (thats what fans of MMM call it)…

* cycle as much as you can to get around – it is good for you, fun, exhilarating and you can discover some amazing short-cuts and places not far from your home.

* do not spend more than you can afford (except on big, important purchases things like your home… and maybe your car)

* if you want something, try to make use of what you have – or sell something first to justify it (I did this with video-games, complete it and sell to fund the next one – I enjoyed games much more this way)

* eat a sensible diet, preferably home cooked/prepared with lots of fresh fruit and vegetables – minimize processed food

* keep eating out to an occasional treat, not an everyday things

* if you prepare your own lunch then you can save a lot of money in a year… and you will really value eating that cooked lunch at the canteen on a Friday when you allow yourself a day off from tuna sandwiches :)

* move more – walking to get your groceries, doing your own garden work and home improvement, do not employ a cleaner

* keep fit and active, you can get your own home gym (used weights from Gumtree/eBay etc) or fit exercises into your life in novel ways

* read real books by real authors – the internet is largely advert-driven and aside from authentic writings from blogs like MMM is not something to read for self-education

* realise that spending and consuming is not a long-term, sustainable recipe for happiness

* live life in balance – consume things in moderation, do not be overly frugal

* save money where you can, in other ways be generous, especially spending on friends & family

* avoid world news topics and worrying over geo-politics you have no control over

* try to avoid convenience (eg. take the stairs rather than lift)

Do you identify with any of the above? If not, then I would urge you to try some of these things even as an experiment.

If you want to get the MMM message in a nutshell then I recommend you listen to this fascinating 30 minute interview. The key thing is that MMM is not “anti-money”, he admits of his own weaknesses which in his case is a luxury home (but attained with hard-work and developed largely by his own hard work in doing it up!). His blog message is “anti-waste” and to shine a light on the problems of over-consumption in modern American society. He seems to be very authentic in his position of being very happy living on relatively modest means – and I believe him.

Anyway, the list above shows how I’ve arrived at this mindset already. Especially the idea that consuming more shiny things does not really bring lasting happiness. That is not to say you should go without basics. However the feeling of getting shiny new car will fade after a while into just a desire for something reliable to get you from A to B. Therefore it is best to go for something sued and sensible. For me a new car does not excite me unless we’re talking a BMW i8 – even then I know the “wow” feeling will probably last a few months or so and then fade into “just another car to maintain”.

I think as one gets older, we get wiser. We know ourselves and what we can sustain, what makes us happy and what does not. You can leverage this ability to focus on the what makes you happy/unhappy to cut out the crap and double-down on the stuff that truly brings happiness. Try to calculate how much you would save over 10 years if you cut out some “expensive indulgences” and replaced them with “bad-ass” versions of them – this can range from your daily £5 latte coffee, your new expensive mountain bike (which you hardly ride anyway) to your new VW Golf which you bought on credit thinking it a good deal and “just what everyone else does” ;)

You also realize that “less is more” and the relentless march towards “faster, more convenient, smaller, cheaper” does not necessarily mean “and better for you”. Case in point: I still use a dead music format: MiniDisc.

Yep – I really enjoy MiniDisc even though I can’t fill discs like an mp3 player and I savour the time taken in crafting a disc with music I sourced for free in legal, ways. Less is more. You’d never see me with a Spotify subscription ;)

I’m not perfectly frugal though, neither am I “mustachian” (a term that describes the teachings of MMM). I could do more of my own home improvement projects. I really admire people who do their own major home improvement like Mr Money Mustache. I am making some small changes in that direction though.

Over to you, give me examples of your own “bad-assity” in the comments!

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