Is it easy to save money or is it hard?
Well, that partly depends on your income. Its easy to save more if you have a higher income (I know, genius!).
But it also depends on your perspective.
If you live a modern Western sedentary lifestyle, its messing with your body and your mind.
And if you watch TV News you’ll pick up the idea that modern life is tougher than ever, the world is a dangerous and expensive place and there’s nothing you can do about that.
In short, you risk getting depressed. And if you get run down, you’re more likely to turn to retail therapy. Stressed people also think less creatively, miss opportunities to get stuff cheaper, avoid investing in shares (seems too risky) and buy too much insurance.
Like I (or rather Scott Adams said) said in Now 8, the first thing you need to do is take care of your basic physiological needs. No, I’m not talking about sex (although I’m told that also helps). I’m talking about stuff even more basic and fundamental than that:
- Plenty of sleep (8+ hours)
- Eat natural food (not processed carbs made in factories)
- Some variety and autonomy in your schedule
- Some quiet thinking time
These are a bit easier after financial independence. But I hope you’ll agree they’re within the reach of almost anyone with a pulse.
So step 1 for someone who’s run down would be to go to bed early tonight, cycle or walk to work for the first time tomorrow and replace their usual Sugar Pops cereal breakfast with scrambled eggs and bacon.
If you’ve been living like a battery hen for years, it takes a little time for your physiology to heal itself fully. But the sleep thing starts to work immediately. And, over a few months, adding sunshine (Vitamin D), exercise (including weights) and a paleo diet can work miracles.
The recovery period is gradual so it can be hard to see. But apparently one of the best signs that someone is returning to good mental health is that their sense of humour starts to come back. This is a sign they’ve regained perspective…the ability to zoom out from their own problems for a minute and look down and laugh at the general absurdity of life.
Once you’ve reached this point, you’re more likely to look around and see the modern world as a place of abundance (as well as ridiculous spending). And yet notice that there’s still a lot of complaining going on.
As Louis CK puts it:
Everything is amazing and nobody is happy
If you are struggling to see this, please watch this video before we proceed to the personal finance bit of today’s lesson:
Now let’s imagine someone that has recently stumbled across the concept of financial independence. They might currently be in a well paid but stressful job. And yet, despite earning a higher than average salary, they might be struggling to see where they could cut their spending.
The answer, as all experienced FIers will know, is that person has a million different opportunities to cut their spending. And the cumulative effect is amazing. I call this The Aggregation of Marginal Gains.
A few of those individual cost saving opportunities might be massive, like the savings available from firing a financial adviser that is screwing you (charging a % of your portfolio value rather than clear, flat fees) which could easily save a million pounds over a lifetime. Or the savings from living in a flat rather than a house. Or replacing an 4×4 offroad Money Incineration Unit with a sensible small car.
But many of the spending cuts are individually very small. Things like dropping “down” one notch on the supermarket price scale. So you might go “down” from Waitrose to Sainsburys. Or from Sainsburys to Tesco. Or from Tesco to Aldi. And so on.
Many would consider that an act of unfeasible frugality. It has been brought to the attention of The Escape Artist that many of The Good People of Surrey think about shopping at Waitrose in much the same way that Texans think about gun ownership. In other words, they’ll give it up when you prise their cold, dead hands off it.
But perhaps this shows a lack of perspective?
Another example of a tiny change with surprisingly large benefits over time is the simple trick of just “dropping down” a product range. So if you are currently on the Tesco Fancypants Finest Baked Beans, you drop down to Tesco Reassuringly Normal Baked Beans…or even down to the Tesco “We Are Giving This Stuff Away” Value Baked Beans.
This exercise may involve challenging your preconceptions. If you have been conditioned to think of yourself as a Nice Normal Middle Class person, the thought of dropping down to the Value beans might start to bring on anxiety. What would the neighbours say? Or your work colleagues? If you’re worried about The Baked Bean Inspectors conducting a dawn raid on your kitchen cabinets, you may need more perspective.
So try it. If you can’t taste the difference in a blind taste test (say 5 times in a row for statistical significance) then there is no difference. Its basically the same shit.
I illustrated this concept in How Much Would Sir Like to Pay for That? using the remarkable similarities between a Skoda Octavia and an Audi A4. Yet people say things like: “I would never buy a Skoda, I love the engineering of my Audi” Well guess what? Its basically the same shit.
There are 2 parts to this.
The first is information. The average punter can perhaps be excused for thinking that an Audi A4 is very different to a Skoda Octavia. The prices are certainly very different. But I’ve already given you the information you need here.
The second part is perspective. Perspective reminds us that the few tiny differences between a Skoda Octavia and an Audi are totally, utterly trivial in the grand scheme of things.
And this is not an isolated example, its everywhere. For example, you may need more perspective if you think:
- the iphone 18 represents a major advance from the iphone 17
- bottled water represents a sensible investment compared to tap water
- a diamond engagement ring is totally different to a cubic zirconia engagement ring
- having 10% extra square footage in your house is going to make any significant difference to your long term happiness
- etc etc
Where can you get this perspective thing from?
Well, it comes from thinking. And, to be more specific, from thinking for ourselves. Until you train your brain properly, it will remain a temperamental and wayward creature. Because getting perspective can be hard, we often need some help from a few potential catalysts.
Catalyst 1 : History
There’s something you need to know about the good old days…they weren’t very good at all. I’m sorry to be the one to have to break this to you.
Concerned about the high cost of living? Yes, eating out is expensive these days. But let’s not forget The Escape Artist’s ancestors who we met in Get Rich with Perspective (Part 1). They would have had to work 6 days a week of backbreaking labour just to be able to afford turnip soup at home in their plague-ridden hovel.
Upset about Donald Trump as US President? I’m not a fan of that hairstyle either but maybe you should be grateful you you weren’t living under Joe “Man of The People” Stalin (estimated number of people killed: perhaps 10 million)? If you are too young to know who Stalin was and how his economic policies worked, you can ask Jeremy Corbyn to explain this to you.
When you look at the facts, its hard to argue with Morgan Housel’s conclusion that we’re living in the best time ever. And we can mostly choose to drop the shitty aspects of modern life: I call this cherrypicking from the modern world.
Catalyst 2 : Nature
Getting out and walking in nature is a great way of reminding yourself of how big the world is and how small many of our concerns are by comparison.
The bigger the scenery surrounding us, the punier our silly little pre-occupations seem. So the best places to be reminded of this are mountain ranges, deserts, forests and stormy seas.
Catalyst 3: Gratitude
Occasionally I catch myself thinking whiny little toddler thoughts about something that is not 100% perfect in my life. A quick self-administered bitchslap usually sorts this out. But even more effective is when I’m walking through a busy London rail station and I see someone with a guide dog and white stick.
I then remember that I can see…its instantly humbling and its like a ton of perspective bricks being dropped on my head.