I’m not the richest guy around.
Far from it.
But with my FIRE Fund worth almost $400,000, and pumping out more than $13,500 per year in dividends, I’m relatively wealthy for a 36-year-old guy.
That’s especially true considering the fact that I quit my job at 32.
I gave up millions of dollars in favor of FIRE. In fact, I stopped chasing money and aggressively accumulating assets years ago. I decided my life wouldn’t be about an endless obsession with pieces of bartering paper. And it’s a decision I don’t regret at all.
Now, the average American would love to get their hands on almost $400,000. No doubt about that.
But how long would it last them?
I think we already know the answer to that question. One needs to look no further than the average lottery winner.
The reason why many people fail to build wealth and/or make their money last is because they buy too much stuff.
Americans aren’t broke because they don’t make enough money. Americans are often broke because they spend too much. More money in their pockets would only cause an equal, or greater, increase in their spending. That’s marginal propensity to consume at play.
The Millionaire Next Door is such a great book because it exposes you to a simple truth: sustainable long-term wealth is built upon a foundation of relative frugality.
Living Frugally And The “Sacrifice”
I’ve been living relatively frugally for many years now. It’s practically part of my DNA at this point, as I basically value value.
Warren Buffett has said it best:
Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
I like a good deal when it comes to time to buy something I want or need, regardless of how much money I have. Hell, rearranging my last name spells BE FIRE. I was practically built for this lifestyle.
Still, living frugally implies a certain sense of sacrifice.
Not spending money on things you desire today in favor of something you (more strongly) desire later means you’re delaying gratification. That’s the sacrifice.
I’ve long argued that the “sacrifice” that FIRE involves is far less of a sacrifice than needing a job for most of your life. I still stand by that argument. It’s as true today as it’s ever been.
However, I’ve felt that sense of sacrifice less and less over time, until it’s basically disappeared from my life.
Even though I still spend very little money on a regular basis (no doubt greatly aided by geographic arbitrage), I don’t ever get the urge to spend more. I don’t ever think that spending much more money would make me much happier. There’s basically no sense of sacrifice at all in my life.
Indeed, I lack a certain something that makes me far richer than my ~$400,000 would seemingly make me.
I believe it’s my “secret sauce”.
And I believe that almost anyone out there can tap into this “secret sauce” for themselves. Once you know what it is, you should be able to take advantage of it in your own life.
This “secret sauce” makes the process of achieving FIRE much easier.
Moreover, it significantly increases the sense of satisfaction and enjoyment that you’ll feel in your post-FIRE life.
And it’ll make you far, far richer than you could otherwise ever could or would be.
A Lack Of Desire For Most Things In Life
The “secret sauce” is…
I lack desire for most things in life.
This quality has a profound impact on my life. I actually would go so far as to say it’s one of my biggest competitive advantages over most other people walking the planet. It’s kind of a superpower.
Having a lot of money doesn’t necessarily make you rich. If your desire for and spending on things is equal to, or greater than, your income and wealth can sustain, you’re actually poor. Just ask Johnny Depp about that.
I feel immensely rich not because I have a ton of money; my wealth is greater than it appears to be because I genuinely don’t desire most of the expensive goods and services in life that most other people are chasing.
This concept goes way further than just spending below your means or sacrificing on your spending.
I’m quite literally saying that I don’t desire to buy the stuff that most people spend a great deal of their resources buying and/or owning. I could have billions of dollars, yet I still wouldn’t want this stuff. It has zero value to me.
This is a very powerful concept.
There are two ways to be rich: one is by acquiring much, and the other is by desiring little.
-Jackie French Koller
It is not the man who has too little, but the man who craves more, that is poor.
The man is richest whose pleasures are cheapest.
-Henry David Thoreau
Two Major Things I Do Not Desire
Take a house, for example.
I wouldn’t want to own a house if someone gave it to me for free. It’s not about the money at all. It’s just something I have absolutely no desire to own.
I’d much rather rent a small apartment or condo that maximizes my flexibility and freedom while simultaneously minimizing my responsibilities regarding tedious tasks that I don’t want anything to do with. Quite frankly, being in a big house with a bunch of stuff gives me a sense of anxiety. I’m not comfortable in that environment.
This totally flies in the face of what most other people believe in. Even though the majority of millennials regret buying a house, they still think it’s the “American Dream”. The irrationality is almost funny, if it weren’t sad. Homeownership is more like an American nightmare for me.
Another example would be a car.
There are few things in this life I’d rather not have in my life than a car. (A house is one such thing.)
There’s nothing about owning a car that appeals to me at all. I don’t desire a car in the least. Again, someone giving me a car for free would give me no pleasure.
The number of sheer bills that come with having a car in my life sends shivers down my spine. The registration, license plate, insurance, gas, cleaning, driving, maintaining, repairing, etc. Yuck. It’s obligating yourself to an inanimate object. I honestly prefer walking to my destinations. I don’t even want a driver’s license.
It’s funny, but once upon a time you had to be a bossed-out baller to get driven around. Only rich people could sit in the back of a car and be chauffeured around.
Now I can pull up a ride-sharing app and get driven across town for a few dollars. It’s incredible. That’s way more desirable to me, plain and simple. I don’t deal with traffic, stress, or hassles. I love it. It’s like magic.
Your “Secret Sauce”
How does this information help you?
I think many people – perhaps most people – should more heavily focus on desiring less rather than accumulating more. It’s about finding your “enough” in life.
Ever-more money doesn’t help you if your desires increase at an equal, or greater, rate. A lifestyle, or a lifestyle desire, that inflates directly in proportion to an increase in means, does you no good.
Now, you might be really talented at living frugally. I don’t think it’s terribly hard to make the sacrifices that frugality implies, for FIRE is absolutely worth the stretch. It’s a logical calculation. Anyone aiming for FIRE would probably agree. Thus, frugality is almost always deemed to be a valiant sacrifice and worth the delayed gratification.
However, actually ridding yourself of the desires that lead to the sensation of sacrifice is far more important and profound as it relates to your long-term prosperity and happiness. It’s hard to be content if you constantly desire more.
The key here is to wake up and realize that the desire is mostly manufactured.
Many of the things you think you desire aren’t really all that intrinsically desirable at all. Human beings ascribe value to many of these things.
Understanding how the hedonic treadmill works is a building block toward this realization. Maslow’s hierarchy of needs also greatly helped me identify what I truly desire and what I truly do not desire. Also, fully recognizing diminishing marginal utility is wondrous. In addition, abiding by an internal scorecard totally alleviates one of being concerned about others’ opinions.
In the end, it’s an individual journey toward losing these desires that hold you back.
But I think mastering the desire – rather than simply mastering frugality, sacrifice, or delayed gratification – is what will elevate your life far past what it would ordinarily be.
And it’ll make you far richer than you would appear to be.
My most recent best-selling book is: 5 Steps To Retire In 5 Years.
It’s certainly possible to go from $0 to FIRE in five years, and I lay out exactly how that can be done. But constantly lusting after things that might not actually add value to your life will make this journey more arduous than necessary.
Reshaping my life in order to live frugally was once quite difficult. But it’s become easier as time has gone on, in large part due to the fact that I’ve simultaneously lost a lot of desire along the way. Spending less has resulted in greater happiness and contentment, so it’s more or less been a pretty natural evolution.
My life has now reached a point to where living on relatively little money involves absolutely no sense of sacrifice whatsoever. I’m now spending and living as if I were a billionaire. This is thanks to a lack of desire for most expensive goods and services.
However, I’m not saying I have no desire in my life. I have plenty of desire. It’s just not for most of the fancy things that other people covet.
It’s really all about right-sizing your desire to that which truly adds value to your life. If you want goods and services because you’re confident they’ll better your life and are worth the stretch, go for it. But be sure it’s a mindful choice you’re making.
The bottom line is this: I fully believe that if you’re able to find a way to eliminate (or at least reduce) a lot of harmful and useless desire from your life, you’ll be far richer, freer, and happier than you are right now.
What do you think? Do you find living frugally easy or difficult? Is it a sacrifice or do you also lack desire? Do you think the lack of desire is a superpower that can make you a lot richer than you might appear to be?
Thanks for reading.
Image courtesy of: digitalart at FreeDigitalPhotos.net.
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