Imagine you want to watch a film.
The cheapest way is to wait for the film to run on free TV. But what if you want to watch it as soon as possible and are prepared to dip into your Freedom Fund to get it?
You have a choice. You can either buy the physical DVD or you can use a Netflix type service to download the film. The film is the same either way, but the download model is more efficient; it’s faster, it uses less resources and creates less waste.
With the download there are no white delivery vans guzzling diesel, belching out fumes and trying to intimidate other drivers. There are no plastic packaging materials destined to sit in a landfill site for a couple of thousand years.
The market rewards the best use of scarce resources and sends you these signals via the price mechanism which is why download services can undercut the cost of physical DVDs. Buying films via physical DVDs is now becoming an outdated sucker move, financially as well as environmentally.
But physical DVDs will probably be around for a while because some people like their physical form – a box they can hold, a thing they can point to. Although we enjoy films as an experience and then as a memory, some people also crave a physical reminder.
This is the basis for the gigantic Hollywood film merchandising industry. When I was 8 and had just seen Star Wars, there was nothing on earth I wanted more than a toy lightsaber. Even though its performance in chopping my brother’s arms off would no doubt have been disappointing.
Physical possessions are not all they’re cracked up to be. As adults we may feel the same way about a new car as I felt about plastic toy lightsabers as a child. But its all just stuff.
Like most people, I was an acquisitive idiot when I was 8 years old. But the acquisition rush always wore off and I gradually learned to be slightly less of an idiot when it came to buying stuff.
Having children of my own now gives me perspective. They regularly fall in love with utter shite. My 12 year old boy sheepishly admitted to me recently that the “must have” toy frog that he bought on holiday last year was just a bit of tat. The next time your co-worker starts bragging about their new BMW, bear in mind that they have less self-awareness than a 12 year old child.
I think about physical possessions and money in the same way as films. Stuff is like physical DVDs. Once you have bought stuff, it sits around long after the thrill of acquisition has gone. Our house is full of these relics of our past spending. Now they just sit there, taunting me to take them to the charity shop.
Its better to have a big stash of financial wealth “in the cloud” that you can use to “download” anything you need. I like to walk around carrying as little emotional and physical baggage as possible. Instead I carry a little plastic card that allows me to access the awesome power of The Freedom Fund.
This is the opposite of how most people live. Most people spend their time and money accumulating stuff. Even when they have almost zero net worth, they are buying more physical shit to clutter up their minds and their living space. Once they’ve filled up the attic and the garage, its off to the self storage centre where they pay more for the privilege (this is good money after bad).
We all come into this world travelling light. Unfortunately, over time we accumulate stuff like ships hulls accumulate barnacles, slowing them down and reducing their efficiency gliding through the water.
When I was younger and renting a flat in London, I typically moved once a year. This was a great way of avoiding accumulating too much shit. When I moved, everything I owned in the world had to fit in the back of a Ford Fiesta. No lorries or workmen were required for the move…I just got in my car and drove to the new flat.
Our ability to accumulate shit grows as we get jobs and pay rises. You may meet someone special and inherit their shit as well. When you move in with a significant other, compromises and babies may get made. Result: more shit. Unless you successfully negotiate with your spouse, you may find yourself losing the war against materialism and end up living somewhere that looks like a cross between a Toys R Us warehouse and Imelda Marcos’ shoe cabinet.
But the good news is that we can always scrape the barnacles off the hull and travel through life with less shit. This requires making conscious choices. When I cycle up Mont Ventoux, I will be travelling light. I don’t want to be carrying panniers, tents, stoves, tins of baked beans and the kitchen sink up a mountain and then over 530 miles. What I will have instead is a credit card that allows me to access all the things I need as if by magic.
These days, I also travel light with my financial assets. I used to own some physical gold in the form of coins. One of the main disadvantages of these (other than not being wealth creating or income generating assets) was that they required storage.
That was fine most of the time when I just stashed them somewhere in the house. But then when it came to our summer holidays I would always feel a bit nervous leaving them in an empty house. So I buried them in the garden.
I then spent 2 weeks mostly enjoying myself…but also worrying in case burglars with metal detectors or some squirrels dug them up and stole them. It seemed unlikely but maybe I’d come back and see gangsta squirrels decked out in gold bling, fronting and maxxing in the garden. You may say that’s paranoid but that’s my point: focussing on physical possessions will do that to you.
If you want to visualise what an extreme focus on possessions does to your soul, remember Gollum from The Lord of The Rings. Gollum thinks that he owns the Ring but the truth is that the Ring owns him.
Gold was only a small part of my portfolio, but it created a larger mental burden than financial assets like shares. I didn’t worry about my shares…I knew that whilst I was on the beach, my companies would be working to create more value for me. So I think of money invested in financial assets such as equities or bonds as being “in the cloud” in the sense that it is not a burden and is not cluttering up my life.
The standard consumer sucker assumption is that the more stuff you have, the happier you will be. This may have been long ago, but most of us in the West have gone way past the point where diminishing returns set in.
Physical possessions come with liabilities. Every physical asset you have potentially requires space, storage, maintenance, insurance and cleaning. In other words, hassle.
When I was young and waiting in the Dentist’s reception, I used to look at the houses in glossy magazines like Country Life and imagine owning the tennis court, the woodland, the swimming pool, the maze and all the shit that went with it. After I actually owned a house (a small London terrace), I realised that stuff comes with an set of maintenance obligations and hassle.
And you don’t need to own something to enjoy it. For example, if I want to walk in beautiful woodland, there are two ways to do this. The Hard Way is to work for The Man, save a few hundred thousand pounds from your earnings (after tax ) and buy some woodland in the South of England.
The Easy Way is just to go walking for free in your local woods. The Woodland Trust plants and maintains woodland all over UK and the woods are open to everyone. If you feel the need to spend money, you could join the charity.
The trees don’t know you “own” them and it doesn’t make any real difference to your experience walking through the wood whose name is on the title deeds at the Land Registry. For all I know, there may be badgers, foxes and other woodland creatures strutting round the oak trees telling members of the opposite sex that they own the woods.
Another way to keep your stuff “in the cloud” is to sell your stuff as soon as you have used it. That way you can use Ebay as your cloud storage datacentre and have the proceeds compounding in your portfolio. Should you need the stuff again in the future, the internet and the stuff will still be there and you can just buy it back again.
In Britain we’ve been conditioned to believe that you can’t go wrong with property. I can understand wanting to own your own home as that provides a sense of security. I can also understand buying rental properties as financial investments.
But I don’t know why people feel the need to own holiday homes. I prefer to keep my holiday homes in the cloud, from where they can be rented with minimum hassle and maximum optionality.
We just got back recently from spending a week living in an apartment bang in the middle of Rome. The apartment was great and the neighbourhood (Trastevere) was beautiful and cosmopolitan.
But I didn’t feel any need to buy the apartment as I know there are any number of great apartments in cool neighbourhoods in amazing places all over the world.
Each time you buy something, you lose some optionality and freedom. Then you’re stuck with an obligation to look after that possession. If I bought the Rome apartment, the dream would be replaced with the reality of dealing with Italian council tax, expensive lawyers and tradespeople,
I wonder…what’s Italian for “You’ve ‘ad some right cowboy put that in” and “Its gonna cost yer“?
Great post as always.
I think you’ve pretty much summed up my entire attitude to possesions here, although I may take it to the extreme by applying the same logic to cars and houses, hence not owning either. Cars are such a hassle to maintain – MOTs, services, road tax. We just use public transport, and if we need to get somewhere the train won’t go, we just hire a car.
I love the bit about walking in the woods – really hits home with me. We’ve got a little baby and we’re living in a flat with no garden, some people find this a bit strange when you tell them (won’t she need somewhere to run around when she grows up?). but we live about a minute walk from a beautiful beach, and numerous parks, which the council kindly maintain for us 🙂
Keep up the inspirational posts 🙂
Taking a few weeks out to travel the back roads of Crete. Interesting chatting to ‘older’ Greeks about how they were bombarded by the credit card companies in the late 80’s, and coming off the back of a communist govt that only fell in 1981 they naturally acted like kids in a candy store. The bitterness of many over being ‘suckered into the 20th century’ is palpable and they know they face austerity for decades. Ironically, the simple lifestyle they had is now sought by refugees from places like London and New York who need a break from the stress and pressure of their respective prison camps – bonkers.
When I got my first (well paid) job abroad I too spent a few hours in First Class scanning the Country Life property pages checking out the big house In Wiltshire or the Scottish Borders I would naturally soon aspire to. Little did I know that 25 years later Not only would I not have a mansion in the Home Counties, but still be spending much of my time bumming around the world as if I were a student, and driving a 20 year old car!
I’m back Election Day, so if you’re heading to France before then good luck and no doubt will catch up in May.
I really liked your comments about owning a holiday home. For years my wife and I have resisted pressure from friends and family to buy a second home, because all I could ever see was days spent there on painting, gardening and repairing, not to mention going there when we would rather be somewhere else. Just recently, friends who own an apartment in Portugal have been commenting on how much it ties them down, and that they have lots of other places they want to see. We came to that conclusion 20 years ago…
This is one of the best FI posts I’ve ever read. I recently had the opportunity to buy a holiday home, with cash. We’ve been many times and it is probably our favourite holiday location. However, the impending burden of owning it fortunately put me off so didn’t go ahead. I’ll just download it from the cloud when we need it!!
Wow..that’s high praise…please pay it forward and show the article to friends. Thanks!
I would echo previous commentators – this is a really great post that gets to the heart of what is going wrong with things today – “you don’t need to own something to enjoy it”. Collective ownership and maintenance is not such a bad thing, sometimes we spoil things completely by trying to divide them up and own our own little piece. Your example of the woodlands is perfect (from a fellow Woodlands Trust supporter.)
(btw you made me think about the ethics of buying DVDs instead of downloading the film – something that had never occurred to me before. Thanks.)
Thanks Cerridwen…I’d agree that The Woodland Trust is an example of what is going right with things today.
What an excellent way of seeing things. Cloud storage for your possessions.
I am slowly in the process of putting more of my possessions into the cloud (see my post on it here, if you’re interested: http://bit.ly/1DrdgUQ). It can take a lot of time after building it all up over the years (even though I am far from being a big “collector”/buyer of things). It is rather a cathartic experience, to be honest!
I am currently in the process of “negotiating” with Miss DD about the same thing. I don’t know whether she will agree in the end or not. We will see!
Thanks again for an excellent and thought provoking post.
Of course if you put some time and effort into building your ‘social capital’ as well as your ‘financial capital’ you’ll find that opens up other possibilities like borrowing DVDs for free or staying in other people’s holiday homes on the cheap. Unfortunately if you spend your life in the office you won’t have much time to work on relationships and you’ll have a narrow circle of friends. Even knowing your neighbours can pay big dividends, but that’s increasingly uncommon nowadays.
Great point re social capital….I’m going to come back with a post on that in future…stay tuned
Have you read mac’s guestpost about social capital and the garden economy on the sawbonessurio site? Part 1 can be found here:
He talks about financial capital, physical capital and social capital. I’d add personal capital to that list to complete my own four pillars of wealth (I’m talking skills, experience, education and so on). Although lots of blogs touch on these areas I feel we’re still all quite hung up on the idea we have to accumulate 25 to 33 times annual spending to be truly ‘free’, as if a pot of “FU” money trumps all else; whereas a smaller pot of money and some cooperation might be a more balanced strategy.
I’m looking forward to reading your take on this when you publish your own post.
Thanks for the link to that article. Really really good reading.
“But the good news is that we can always scrape the barnacles off the hull and travel through life with less shit. This requires making conscious choices” – love it. There’s always a chance to turn it around.
I helped Mrs Z’s nan move recently, the amount of tat we ended up taking to the tip was outstanding, people do accumulate shit. That said, throwing a TV in the tip was satisfying.
Hope the training is going well for Mt. Ventoux, not sure about where you are, but it was windy today here”
Brilliant post. I was just thinking myself how much sh*t I have accumulated and need to get rid of. When I last moved house, I got rid of a load of stuff. When I was a student, I lived out of 3 bags of possessions. I dont buy DVDs or books now. I just download books and swap with friends when they sounds like good reads. I usually wait for the free books offer on amazon and download. I now have plenty of reading matter and all stored in the cloud. I store all my photos in the cloud and download and show people any of them wherever I am.
I went through the stage of wanting to buy a holiday home (when I was working in an office with aspiring social status work colleagues) – but then realised it would limit me to one location. Just goes to show how you get sucked into purchases that are really not necessary. I buy experiences now. My biggest expense at the moment is my car – which I need to travel to the office prison – but I can see that this cost will reduce substantially when I escape. I may not need it at all in the future.
The last cycle tour I did, involved panniers (for my clothes/camera/maps) everything else (food/drink/accommodation) was bought on route. A great adventure want to do that again some day. Enjoy your cycle adventure!
More of an aside really, I still use LoveFilm (now Amazon) that provides unlimited DVDs and BluRays using the normal postal service. To use a streaming service I’d have to buy some new equipment, which I have enough of already. Also, I find the quality of BluRay outstanding, the streaming I’ve seen doesn’t come close.
Minimalism as scraping barnacles off your hull, I like it. You’re right of course, your “stuff” is an emotional prop that drains you, but is it always that pathological?
As an example, my son at 10 is past his lego phase yet I’m prevaricating on boxing up the tens of lego models cluttering up his room. Mostly I can’t be arsed (yet), but partly it’ll be the end of another era, the early models being a product of many shared hours together, the later ones a result of his increasing skill and independence. Yes it’s tat that we’ll give away to cousins/ sell/ give to school, the same as we did with his cuddly toys, but it’s tat that evokes pleasurable memories.
Am I wrong to retain my daughters old favourite ‘cuddly’ up in loft where it evokes memories of bedtime stories and rhymes, every time I get the Christmas decorations down?
I can recognise the emotional hold that this stuff has on me but does this make it baggage, does it slow me down, hold me back or would I just forget without it ? Dunno.
Although I accept the philosophical and psychological arguments underpinning minimalism and non attachment I sometimes get a feeling of self centered coldness from some of stuff I read on the interwebs. (Not here I hasten to add).
BTW. I trust that piece of plastic you’ll be waving up the mountain isn’t relying on lowest bid IT to keep it functional. A few euro tucked in the seat tube might not be a huge aerodynamic faux pas. Enjoy!
Right on both counts, Nathan.
1. We will not be getting rid of Mr Piggly.
2. The Escape Artist always has some hard currency up their sleeve.
@Nathan – Whilst my kids (aged 5 & 6) have some new Lego, mostly purchased by their Grandparents, the majority of the Lego they play with is MY old Lego – rescued from my dads loft a couple of years ago. I was fortunate that my mum stored it all away (neatly, with the instructions, she was like that!) for the future.
@theEscape Artist. Nice post as usual. Talking “possessions” ….Tucked away on a top shelf at home, far out of the reach of the kids, i have my original Star Wars & Empire Strikes Back cinema programmes. Star Wars was the first film i saw at the cinema – despite purging/donating hundreds of possessions over the years these i just cannot throw away. I also just received my copy of “Happy” in the post – that one is your fault lol.
Hope the training for the big ride is going well. Cycling from London overnight to the coast myself tonight with a few equally mad friends – 65 miles. Not everyones cup of tea but cycling through the countryside with a spring sun-rise is just lovely in my humblest.
Thanks LCIL…my cycle training is going well…enjoy Happy (let us know what you think when you’ve watched it) and the ride to the coast…sounds great
An excellent post there which brought to mind this classic:
[…] course TEA offered a solution to this problem by recommending cloud storage for your possessions. In essence the argument says you should rent/hire instead of buying wherever possible or makes […]
Pity your article didn’t get more circulation.