One of the things she has taught me is to live life a bit more.
And one of the key take aways about this way of thinking is NOT to be frugal just for the sake of being frugal.
The point here is, we aren't aiming live on the lowest common denominator.
The lowest common denominator being... to live as frugal as possible, taking up freegan activities to obtain stuff for free, and saving the rest.
This means eating free food or chai-png FOREVER, cold baths, not taking transport and just using your legs...
All of us are trying to strike a balance. Even though I get a lot of my stuff for free, I also try to keep a balance on what I allow myself to indulge on.
What's the big deal to die with $20 million worth of assets? Just to pass it on to your kids? Are you trying to play for a top score? No right?
Saving, spending, being frugal, overspending... all these are part of the same equation. They are all trade offs.
There's a tendency for frugal people to diss on people who spend a little bit more...
"Oh what a waste of money buying a Starbucks..."
"Oh what a waste of money buying a branded bag..."
"He shouldn't own an Audi..."
"He shouldn't even be owning a car..."
The list goes on... we pat ourselves on the back for being more frugal than someone else.
And to me, this is pure BS...
Make no mistake, I'm not saying being frugal is bad. I'm not saying spending more is good or bad as well...
But let us be fully aware of our decisions.
WHY am I frugal?
I am frugal cos I don't have a lot of money. I didn't like my work. I enjoy doing nothing and being in a semi-retired state. Being frugal allows me to do this instead of having to work for money.
I don't mind being frugal and would rather be frugal than to work for money.
Next I look at my wife... she's not really frugal but she's not spendy as well. She loves her job... She has no intention to retire significantly earlier and she have good financial habits (which I enforce)... in this case... why should she be excessively frugal... some people may think we don't need a car... yea we don't.
Like we don't need to do a lot of other stuff. We don't NEED to bathe in hot water, but it makes life better...
So she enjoys having a vehicle cos she works in an isolated part of the island... and if we save the money by not buying the car... well... what are we saving it for?
For her to retire earlier?... No... for me to retire earlier?... No... then for what?
I have a friend... I've mentioned him before. I think he really wants to buy an Audi...
He's not planning to retire early. I don't think his wife is planning to retire early. He has 2 kids... He is frugal in many other ways...
I was talking to him recently. I told him, if you want to buy the Audi, go and buy it, maybe a second hand one... You are earning enough to afford it and still save. Read old post about 曾经拥有.
If he keeps thinking about how indulgent it is, he's never going to buy it. There's no justification to buy an Audi if he's just looking for transport...
But this is the whole point of today's post... what is he/you saving for?
On the extreme end of saving mindlessly is the end result of having $20 million in assets and dying, leaving all the assets to your kids. And somehow, you've lived a frugal life with stuff that you've always wanted but cos you were frugal you never really bought it for yourself.
And I think this is a big fallacy that both parties don't think about...
People who are spendy tend to just buy stuff to make themselves happy, but they don't consider that spending too much will keep them in their jobs for longer and they may not have enough for retirement.
But on the other side, people who are too frugal over estimate how much they need to retire and just mindlessly save to beef up their AUM and at the end, just don't do things that they would have liked to try to do.
Now, I'm not saying go out and go wild with your credit card and YOLO. That's not my point.
If you want to retire early, then there are sacrifices to be made and being frugal is part of this goal.
If you want to retire early AND afford an Audi consistently... then certain sacrifices must also be made.
If you don't want to retire early, you must still plan for retirement but there's also no point in senselessly saving without doing stuff that you want to do.
So when someone says I can save by... or by... I acknowledge that, yes, I can save more... but... WHY?
What more do I need to save for?
Now, this doesn't mean I don't continuously look for more ways to save money. Some stuff I prefer to do more than others. Some indulgences I enjoy more than others, some money I feel is worth saving on, other stuff I don't believe in skimping on.
Once again... a post such as this is super prone for misinterpretation.
I'm not saying to go and wantonly spend excessively. I'm not saying don't be frugal.
This post has not much to do with that...
Rather this post is pretty much about understanding why you are doing certain things...
It's not that being frugal is the answer to everything. It's not that over indulging yourself is the right thing either.
The point is, there is no right or wrong, what is wrong, is ignorance.
So if someone enjoys the branded bags, but doesn't earn a lot and keeps complaining about not being able to retire... that's just plan dumb. This is ignorance about cause and effect, that what this person has done is affecting another part of his/her life.
Or if someone is super frugal and skimps on everything and saves up religiously for years til his dying day leaving millions to his children... when he actually had interest to travel around the world at least once. Once again, I would say this person is ignorant about the reason behind behind being frugal and ignorant about what life is about.
But if someone loves their job and is intending to work til the later years, and loves to buy branded bags, and also saves enough for retirement and this person is happy with this lifestyle choice. There's absolutely nothing wrong with this decision as well. As long as this person knows why they are doing what they are doing.
The thing is that, this is all part of the same equation.
If you don't use your money to do what you want to do, then money is stuck as money.
Which means you have wasted your time earning money that didn't help you do things you want to do.
This is also similar to being frugal. If you're frugal, you save money, but this also needs to translate to thing that you want to do...
Things that you want to do is very loosely defined... Like some people might want to leave a legacy to their kids, they want to buy a car, they want to retire early, they want to travel the world, they want to have more time to spend with their loved ones.
And the perfect balance to this, is to die whilst spending your last dollar doing something that you want to do. After setting aside the amount which you want to leave to your kids.
Of course this isn't possible.
But I think that's the best balance to achieve. Or aim to shoot close to this amount...
Cos that's what life is about isn't it?
Your time on Earth, and doing what you want to do.
Earning more or being frugal... all these are the avenues so that you can get a good balance between what you want to do, and your time available.
So next time you think you want to be really really rich... ask yourself... Why? And how rich?
When to stop earning money cos you will need time to spend it as well.
Similarly, when you are thinking about being miserly frugal, again, ask yourself... Why?
Cos saving that extra dollar, or $1,000... might mean nothing in the long run. Especially if you love your job, or are already earning a passive income and you are spending less than the passive income earned.
As much as it is irrational to spend money without earning it, earning money without spending it is just as irrational, cos that means you have wasted time which is limited...
("Spending" money can also be considered having sufficient money in the bank to achieve a sense of security. Cos you are getting a "use" for the money even though it is not spent. But there is a limit to this.
I think I can say, I will feel more secure with $1 million as compared to only having $500k. But if I was looking at $3 million vs $5 million... how much more secure would I feel? So if you have $3 million and are trying to earn/frugal your way to $5 million... I would question... why? Is $3 million not enough?)
Have you thought about this? Are you being frugal for the sake of being frugal? Do you already have enough but are just insecure and continuously want to earn/frugal endlessly when there's no real need to?
You may want to take a step back and look at things again. Maybe you don't need to be frugal anymore, or you could spend a bit more if you're planning to work til 60 in a job you love... Why not?
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