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
In my area, landline phone + dialup = the cost of high speed internet. If you can get rid of your landline, you can save as much money as getting rid of high speed internet (and with fewer withdrawl symptoms).
Alas, my wife has some strange attraction to the telemarketer-infested landline phone.
My employer allows me to work 4 days one week and 5 the next (slightly longer days). I get a 3 day weekend half the time, and save on gas (70 mile round trip commute).
The car I use to commute is a 1998 Contour … I’m hoping to squeeze a couple more years out of it :)
“One thing I realized when I first started being more careful with my money was that the things I was giving up, weren’t really sacrifices at all.”
And this is the key to living the life you really want to. Give up all that stuff that doesn’t matter so you can have/do the things that do matter.
Firstly, thanks to Lazy for letting me guest post, the pleasure is all mine.
@Kosmo You’re right about the phone and in fact I have plans to get rid of the POTS phone and switch to a funky VoIP one. And don’t worry, my internet plan is still more than capable of serving me enough web goodness quick enough :)
I think:
“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.”
is an amazing example of how powerful compounding is. People always use the “I want to enjoy my life now, not when I am 60!”
Yeah… well when they are 70 and working they will regret it.
I just have one question: if you’re giving up all the little entertainment things (i.e. internet, movies, cable, etc.), what exactly are you doing on your down time? LOL.
All jokes aside, I do understand your message here. I am currently working toward the flex work schedule and the passive income schedule. I haven’t yet cut out all of the little impulsive pulls – my downtime depends on them. Downtime = relaxation = peace of mind = healthier. But, I agree, everything doesn’t have to be had now, somethings should wait until later. Part of the thrill is working toward ‘later.’
@My Life ROI: how true. I certainly don’t want to be in that position at 70 (or even 40) :)
@Su Prieta: I have lots of downtime but the good thing is, most of them are cost-free. I go cycling, rollerblading and play football (ok, ok, soccer, football where I come from). I only watch minimal TV but I also socialise a lot, usually with friends at someone’s house. Reading a book from the library is also cheap but classic downtime. Not all relaxation costs money.
@Slinky: I have also come to see that over the past year or so, you’re right, it is key. I have been more happier with less stuff than ever. Minimising those things that don’t help and maximising the things you love makes for a happier day.
An excellent guess post, Andy. Too many people seem unable to see the advantages in postponing short-term pleasures. But the ability to take more time off each week, or to retire, rests on being able to make such a ‘sacrifice’.
Good luck on retiring at 40; it sounds like a laudable goal, and one I hope you achieve.
This is a great post, with lots of fodder for thought. I, however, like my job enough that I do not want 3 days at home. But that may change with time, and having that option when things are different would be great.
Great post! Your way of thinking is very inspiring. I have heard the phrase “live like no one else so that you can live like no one else” and have been trying to align my lifestyle with that train of thought. Your quote is very similar to that one and I can see how it is very influential for you and your life.
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@Roger: thanks for the wishes of luck. Yeah, it’s definitely a small percentage of the population who choose something different to the normal.
@RicherAndSlimmer: I still do enjoy my job and I’m lucky in that respect, however I love my own time more :)
@Steven: I like that phrase too, it is similar. That quote I initially wrote I only heard the other day but you’re right, it will have a big influence on my life.