This is a guest post by Andy over at Retire at 40. His plan is to get out of the rat race by the time he turns 40, which is now less than seven years away. He does use the British spellings and terminology. I thought it added to the character of the post and left them as is. So grab some crisps (potato chips to us US folk) and have a read. Check out his great blog and subscribe to his RSS feed.
I heard a phrase the other day on Twitter (my new plaything) and just thought I would share it with you since I think it is relevant in the Personal Finance world.
"Entrepreneurship is living a few years of your life like most people won't, so you can spend the rest of your life like most people can't."
It's an interesting quote and one which bit me almost immediately. I could see straight away how it was relevant not just to entrepreneurship but to my new frugal and simple life. I had already figured out that I have to give certain things up (for example, selling my car) in the short term but in the long term I knew that I would eventually come out on top.
But wait, let me just backtrack a little.
You remember when you were young and time didn't ever last for something as long as 10 minutes. If you wanted something, you wanted it NOW! There was no such thing as waiting and there was certainly no such moment in time such as your Mother would describe as "You can have it later". Everything had to be now and nothing could wait. But you know what, that was a long time ago and things have changed.
Looking Around You
Well, okay, things haven't changed for everyone. Some people still want everything and they still want it now.
That SUV that lives down the road, guzzles lots of gas and most probably bought on hire purchase [Editor's note: Those in the US, can substitute the phrase "on credit"]. The owner of that car wanted it all and they wanted it now.
That person just coming out of the supermarket groping through their plastic bags for sweets and ready to pop in that microwave meal as soon as they get home. They couldn't wait just 15 more minutes to prepare some nice, healthy and cheap food and instead had to pay more for convenience (both in monetary and dietary value).
Or how about those who say they don't have time to review their monthly outgoings, prepare a budget or try to save money. They want to live life as fast as possible, yet ultimately they'll be the ones who end up with the least time to enjoy life because they'll have to work years longer due to the fact that they're not careful with their money.
The Sacrifices - or are they?
One thing I realised when I first started being more careful with my money was that the things I was giving up, weren't really sacrifices at all. In fact it was quite the opposite, I was inching closer to freedom from a lot of the things I used to think were important. During work hours I would be buying a coffee or two everyday, going out for lunchtime and snacking on afternoon chocolate. Thinking that I was treating myself because "I worked hard, so why shouldn't I have this" was one of my ongoing thoughts.
Since then however, I have realised that all I was doing was spending the exact same money I was there to actually earn! How silly. And it wasn't long after that that I also realised that if I gave all those things up, I could actually go down to a four
day work week and I wouldn't actually be any worse off money-wise. Granted, I didn't just give up those things but quite a few other things too, like evening take-away meals, an over-the-top internet plan, some DVDs/CDs and movies and a few other small items too.
But what did I get in return?
I got a whole extra day of the week all to myself! And this is where one definition of 'sacrifice' comes in:
"Forfeiture of something highly valued for the sake of one considered to have a greater value or claim."
Yes, I gave up all those little things but when you add them all up, they still didn't come anywhere close to actually having three days of every seven all to myself. No matter how much I add those things up, just knowing that I will only ever work two days on the run (and then have either Wednesday or the weekend off) is just a feeling that puts you on a high the whole week.
No coffee, no chocolate, no pizza, no speedy internet connection, no movie, no car and no fizzy drink can put me on such a high for so long as having an extra day off work. And that's the secret for me and should be for you too. Each time you think that giving something up, not doing something or forfeiting something is hard, just think of this.
Even though you might be "living a few years of your life like most people won't" so that you can "spend the rest of you life like most people can't", you should still get the feeling that "your current life is still better than most other people's anyway".
Photo Credit: floodbeast
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