I always follow my wife on her business trips. Sometimes they end up on school holidays so it's more expensive.
Up til now, I've been following her to KL and France.
I go to KL around once or twice a month, the cost is around $60-$120 depending on how late her notice is.
Sometimes we buy my ticket and her business trip gets cancelled and we may forgo my ticket. This has happened at least 3 times. I fly on budget airline so there's no way to change the dates, and there's no way I'm going to fly alone just to utilize the ticket. That's just throwing good money after bad money.
And I've followed her to France once and we're likely to go again soon. Cost for us to fly to France is usually around $2000. This includes my flight and a couple of extra days of accommodation for us to look-see.
So I would think the decision to be following my wife around on her business trips has pretty much cost us $5k-$7k until now.
And the question becomes... has this money been well spent? Or is it considered a waste of money?
Now of course I'm sure everyone would agree that this spending is probably unnecessary. I could just not follow her around and she could go on her biz trips alone.
So if we look at it very simplistically, I'm pretty sure we would all conclude that this is considered a waste of money. It's like buying an LV bag. It's just unnecessary.
We can afford it but there's no real need for it. Right?
If we look at it this way, then there's nothing to really talk about. This money has been wasted.
But I prefer to look at it another way.
You see, if we always look at NEEDS, then there's really very little that we really NEED to spend on, and then we will conclude that everything else is considered excessive spending.
Like we could eat economic rice everyday, that's probably the cheapest food in terms of variety and quantity, but I think many people don't only eat economic rice everyday, they may opt for a more expensive noodles, or ramen, or korean food, or western food, etc.
So I think there's a scale of needs vs wants.
To live, we need air, food and water.
We won't really die without clothes and shelter, but I suppose it's really high up on the needs scale.
TV, internet, alternative food, stuff like these I would think, yes, they aren't really needs, but they have become so common in our daily lives that it would be pretty inconvenient to not have them around.
It's like... would you buy a car without an aircon? Even though it could be cheaper without the aircon, I think most people would expect to buy a car with an aircon. But long time ago, cars didn't have aircon you know.
Then as we go up the needs/wants scale, there's taxi/Grab rides, restaurant food.
Overseas holidays and other stuff.
And right at the top I would say luxury products are absolute wants. The idea of spending $20,000 on a watch, I classify them as absolute wants.
And highlighted in the red box, I put my car and my trips with my wife and even my desire to retire early.
They are really high up on the wants ladder.
We could do without the car and my wife can just go on her biz trip by herself and I could continue working. All these are wants.
But let's think about my previous post on being frugal for the sake of being frugal.
Now, I was frugal for the sake of retiring early.
So there's a cause and effect.
And a lot of people work and earn to buy stuff and that's fine.
It really depends on their priorities.
Most people are able to afford the stuff on the needs section and also at the start of the wants ladder.
Most people are able to cover up to holiday trips. But yet they hardly have enough money saved up.
A lot of people buy stuff. An additional $3 here another $10 there, what difference does another $50 make?
Remember it all adds up. All these small amounts will add up and will be traded off in some other way.
There's always a cause and effect.
So if someone buys $10 lunches regularly. Then they will have $10 less per day to save.
And over a fairly long period, they will have less money to spend on their holiday.
If someone buys clothes regularly, $200 per month, then after a year, they will have $2400 less, which could have been used to go on a trip or further plan for retirement.
For us, we don't buy clothes regularly, or small toys or even have many hobbies.
To have this car and my regular trips following my wife, we are fully aware that our bank account will feel it.
So the question becomes... what are we trading off?
By spending on the car and business trips, what are we giving up?
We can easily just say, we are giving up a larger AUM, BUT, why do we need a larger AUM?
What does a larger AUM do for us?
Typically, we would say, a larger AUM would allow us to retire earlier.
For us to reach total financial independence earlier.
We could buy even more assets and invest and get an even LARGER AUM...
And then what?
Earning money and accumulating a large AUM to generate a passive income to obtain financial independence pretty much also needs a driving force.
More often than not, the driving force is an early retirement. To do what you want to do to allow flexibility and freedom.
But if you don't want to retire early... then do you really need to save so much?
Let's look at my case as an example.
I'm happy supporting my wife. She's happy to work.
We could do this for many years to come. Even if she didn't like her company, or if her situation changed, she would still find another job and continue working. She loves doing what she does.
Annually, we still have a growing AUM, and we likely would be living like this for the next 10 years or more.
So for us to incur these additional expenses, like the car or following her on business trips...
If it makes her happy, why not?
If we don't spend now, then when should we spend?
Now... this is a very interesting thought. And maybe quite a number of readers may not understand it.
IF you are happy with your current situation and you still have a growing AUM.
And you will be doing what you are doing for the next 10-20 years, would it be ok to increase your level of spending?
So for us, I don't really consider our car or biz trip spending as wasted.
Cos... what am I trading off with it? Am I sacrificing anything more by indulging in these spending?
Yes I sacrifice future AUM. But yet, I have nothing more I want to do with that AUM.
I do think that me following her on her biz trips are indulgent. I recognize that.
And yet, IF we ever wanted to spend money, these are the kind of things we'd want to spend on.
IF we don't spend on these, then there would be little other things we would spend on.
Like we won't be buying stuff, like physical items...
So maybe I'm starting to get the feeling of why other people spend on stuff...
Like maybe someone buys a $20,000 watch...
Most people would think they would be working til 60 or so...
And they aren't planning on retiring early. They have their monthly housing installments, insurance installments, etc etc...
AND they still have excess money... and over a few years, they save up $20,000 in cash, and they have nothing more to do with the money, they already went for enough holidays, they have investment policies that they believe are enough for their retirement...
So what do they do with the additional $20,000... buy a watch lor... or any other indulgence that they like.
And this is especially valid for high earners, like managers or senior managers, cos they have dual income and their monthly cashflow is already stable.
So maybe... indulgences and luxuries aren't as irrational as it seems.
Of course if we look at someone struggling to make ends meet and they indulge themselves then that's a different matter. Like if they sacrifice needs to indulge in their wants, or go into debt, that's an absolutely different matter. Cos they could be putting their money to better use, or they could be planning for their retirement. Cos I think, there's a lot of other people who haven't settled all their basic needs and financial planning, but yet they are still indulging themselves...
For these folk, then I believe it is irrational to be spending on frivolous things.
But if they have already settled all their stuff, then I suppose... making money IS for spending on all the frivolous things. That's the whole point of earning MORE than what is needed to cover your needs.
Strangely, it's only during these few months that I'm more lax with our spending.
Somehow, with the freegan food and the arrangement between my wife and I and what we want to achieve and our future, I've come to terms with a lot of things and am more open to spending on different things.
Doesn't mean I'll be going crazy on spending, but rather, I think there's some balance between earning, necessary spending, and indulgences.
So I think, it's important to identify the few key things that will make us/you happy and focus on them.
Like... if I don't follow my wife around on her biz trips, she may not be as happy to continue working cos... seriously, it's just different when someone is around as compared to going on a biz trip all by yourself.
Whereas if we spend money on a luxury bag, it won't make her as happy as if I accompany her to go for a high tea once or twice every year.
I would like to make it clear though... that I don't really like to follow her around on her biz trips.
It's just unnecessary cost to me and it's tiring flying around.
But since I don't have much to do, I accompany her, cos I think my reluctance and unhappiness isn't very high, whereas she will definitely be much happier having me around during her biz trips.
So from an overall family happiness index, I think it's still a net positive for me to follow her on her biz trips.
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