I assume that, like me, most of you are readers of all sorts of finance blogs. I just counted my Google Reader subscriptions, and I currently subscribe to over 60 different finance and investing blogs. I’m not sure what’s more impressive – the number of subscribers or that I can count to 60. As I’ve mentioned before, I tend to stay away from bloggers who are neck deep in debt and despair. I do this because their stories tend to all blend together and because there isn’t a whole lot I can learn from somebody who only grasps the basics of finance. It’s like a 5th grader trying to teach you trigonometry.
I often wonder why these bloggers never “level up” when it comes to their finances. Don’t they want to maximize their earnings? Don’t they want to start learning about stocks and other types of investments? And then, just recently, it hit me. It was like an epiphany or something. Or maybe I was high off the fumes of the chip truck. But I realized it, and I’m going to share it with you. I’ll even bold it, because it’s that important of a discovery. Are you tired of me teasing you yet? DON’T ANSWER THAT.
Most people don’t actually want to be rich.
For the sake of this post, let’s divide people into two camps. The first camp are people who openly say that they don’t want to be rich. I understand there are other motivations in life and that they’re more important to these people. They want to push out many children, or spend all their money on orphans, or other such foolishness. Or, on the rare occasion, they sometimes choose to spend it selfishly. I know, this is the first I’m hearing of such a phenomenon too.
While I disagree strongly with that sort of alternative lifestyle, I can see the allure. For many of us, stuff equals status. Why drive a boring, practical car when you can drive a nicer car for an extra $5,000 per year? Why live in a regular house when you can live in a fancy-ass one? Why get average looking hookers when you can get two knockouts get married? Nice things are nice, plus you can impress your friends with them.
Chances are though, if you hang around here even a little, that you belong to the second group of people. You’re jonesing to join the club of rich people, and that means you have to practice a measure of frugality. Us regular folk don’t have unlimited amounts of capital to invest. Nobody’s turning into Trent Hamm or anything, but I’m not alone in looking for ways to be cheap. And that’s okay. It’s part of the journey to financial freedom.
Which brings us to the point of this post. Do we have it wrong? Are we all the suckers for working hard and saving our money?
Think about it for a minute. You can get credit for damn near everything these days, assuming you’re not a dirtbag. I could travel a long time before I reached the $15,000 limit on my credit card. I know I have the income to qualify for a mortgage on a brand new house and buy a brand new car in the process. I could live it up, and for a while too. And hell, I probably have the cash flow that I could pay these things off in a reasonable amount of time.
Then why don’t I? Why do I continue to snap up $9 shorts at Wal-Mart? (The answer is because the BASTARDS DIDN’T HAVE $3 SHORTS LIKE LAST YEAR.) Why do I avoid the temptation of replacing my 10 year old tv? Why don’t I move into a bigger and nicer house, since such a place would definitely help attract the ladies?
It’s simple. The answer is freedom.
I’m going to reveal something to you guys. In approximately 18 months, I will have paid off my mortgage. Once that happens, I’ll be able to afford to retire. I could, theoretically, be a 30 year old retiree. I’m not talking about the BS retirement certain other people have talked about. I would have enough rental income and dividend income to support myself. Now this isn’t going to happen because I’d get bored and because I don’t want to stop at the minimum.
Over the past decade or so, I’m worked really hard at growing my net worth and my passive income. I’ve sacrificed vacations (I took exactly one week off work between 2003 and 2010.) I quit playing golf, because the game costs too damn much. At the same time, I poured every last penny into investments. Why all the sacrifice?
Because I want to be free. At this point, the desire for freedom is one of the strongest in my life, along with lust. I am clearly a horny bastard.
I can’t understand why people would deliberately take steps away from freedom. Is impressing their friends more important than financial security for their family? Is a nice house worth the stress of knowing you need your job to eat? For me it sure ain’t. This isn’t even a choice. Freedom wins every time.
Or is it because people can’t defer gratification? Sure, they might save a little, but they just can’t bring themselves to sacrifice to the point where it hurts a little. People usually associate this with the younger generation, but I know plenty of baby boomers who are living in the now too.
Getting wealthy isn’t really that hard. You just save some money, invest it, and then repeat the process a whole bunch of times. Once you get to a certain point, freedom comes into view. I’m at that point. And I can tell you, it feels a whole lot better than any amount of stuff, drunken nights or vacation ever would. That’s the point of all this.
That’s inspiring. Congratulations!!!!
I had a feeling you were in that sort of financial position, seeing as how rabid you are about investing, talking about how those people ‘retiring’ weren’t really retiring and so on.
You’re just like my other two friends who are in the same position. One girl I’ve known since elementary bought her first house at 19, fixed it up, sold it and upgraded to a safer location in her city for her kids, and is now mortgage-free and debt-free, just by being a nurse and her husband working in a factory.
Another girl I went to school with is a doctor, and her husband is a dentist. They’ve purchased a home pretty recently (in the past 2 years), and they have a kid right now. By next year, their mortgage will be done, just shy of 30.
Me, I’ve taken a less intense approach in general, probably because I’m spoiled because my job pays well and I have been bitten by the travel bug.
, especially since I can control that situation by keeping my expenses low and my income high.
I also want to not stress out about anything, and have a good work-life balance where I live life more than I work
I didn’t sacrifice any years before, during or after high school as you did, to save every penny and plow it into investing or buying a home, but then again, I wasn’t $$ savvy enough to do so until I started working and clearing my debt about 5 years ago.
Just think of how far ahead you’d be if you started earlier.
You’re far enough ahead that I wouldn’t worry about it. When people travel who clearly can’t afford it, that’s when I have a problem with it. Feel free to see the world. Bring me back a t-shirt.
True. That’s what I tell myself
Besides, I don’t want to be old and traveling the way I do now. I’d be so cranky and an AWFUL senior tourist.
First off, congratulations. The idea that you’re paying off your mortgage, while many 2 income families struggle with a mortgage into their 40s and 50s makes their situations even more laughable.
Also, I don’t know what you’re talking about with the frugality stuff. My 03 Malibu is the pinnacle of luxury.
My 02 Focus would argue with you. Hey, it has power windows AND a sunroof.
I didn’t know there were 60 non-debt Personal Finance bloggers. That’s the most impressive number in the article.
(I kid. Congrats on the saving part – that’s impressive, and I’m sure you’ll be playing golf again considering you’ll be working past the point where you even need to work!)
I have taken the longer approach as well preffering to strike a balance between saving for the future and enjoying some time as i travel through life. House was paid at around 40. As for the hookers / R/T – I budget mine. Extra fun cash I could waste on the wife or mistress is sometimes much better spent with an hour with a proffesional with no hangups.
Do you guys think Paul is being serious about the hookers? Because if he is, that’s awesome.
What I want to know is when you are going to give yourself the permission to start living and enjoy things a little more Nelson. What you say is all well and good, but something tells me that even when you are “financially secure” you will have a hard time spending any money because you’ll still worry that someday somehow it might not be enough.
What do you think? Are you ever going to loosen the purse strings?
Well, I am going to New York and Toronto in less than a week, so I think I’m starting to loosen the strings a little. I get 3 weeks of holidays a year now and I take all 3 weeks. I don’t work quite as hard as what I used to.
I’m never going to turn into the guy who spends all sorts of money. I don’t know whether it’s not in my nature or whether I’ve just been so cheap for so long that I can’t remember the alternative.
I think it’s a mistake to equate overspending with “living” or fiscal restraint with somehow cheating yourself. While it can happen (see: Hettie Green) it’s also true that you can live well within your means and enjoy life. What’s the best part about having enough money that you don’t have to think about money? That you don’t have to think about money!
[...] What’s The Point Of All This? from Financial Uproar [...]
You are spot on with this post. The last 2 sentences of your concluding paragraphs says alot
“Getting wealthy isn’t really that hard. You just save some money, invest it, and then repeat the process a whole bunch of times.”
The problem is… people are lazy and dumb. They don’t want to go the easy route.. They think it’s hard.. nope.. just need discipline and patience.
Well said!
Congrats on almost paying off your mortgage! I used to have the “don’t spend, save, invest, repeat” mentality but then I realized one day that regardless of my income over the years, I’ve pretty much had the same expenses for the past 7 years. This, to me, indicates that I probably won’t succumb to lifestyle inflation when I start having “real jobs” again which means that I pretty much have freedom already. I don’t need to have a mortgage-free house or a fully funded RRSP IMHO because I literally spend 10-15k a year. I could a part-time minimum wage job for the rest of my life and still live in the level of comfort that I’m used to. So, my savings are invested, earning me some nice returns but I’m taking my extra money and using it on *me* right now. Once I go back to the 9-5 office slave work, I won’t be able to take long vacations or visit my friend in Thunder Bay on March break…
I’ve seen the numbers for real estate in your area. It’s every bit as good as I was getting when I was buying property a decade ago. I like your strategy.
Like my Dad, I think I take active steps to hide the amount of money I have. You could say I hide behind the jokes.
[...] week’s un-submitted carnival entry comes from Financial Uproar just because I know how much he cares about being in carnivals. The man is on the home stretch [...]
First time here – we are aiming for freedom to do what we want in 5-10 years, when we will be 35-40. Current net worth is about 7x yearly expenses – we just need to keep focusing on non-wage income streams. It’s staring to really look achievable as long as we dont change our minds and stop wanting it.
so what exactly is wealthy? i have been trying to define this for many years now but i think it has a lot to do with an individual’s personal goals and comfort levels. there are other things too like health issues that may blow the budget if it isn’t padded enough. how much do we need to feel safe retiring?
[...] in September, I wrote a post titled What’s The Point of all This? which, among other things, disclosed just how close I am to financial independence. Many of you [...]
Hi Nelson! As mentioned in the other post, can you give us an idea of how much you have for retirement? Are we talking $500,000? $1 million? $5 million? Thanks!