The difference between frugal and cheap


So there was quite a turn-out at the London FI meet up last Friday.

I don’t know exactly how many people came (too many to count easily) but it was a lot. I talked to as many people as I could but still didn’t meet everyone…and I was there over 4 hours(!).

One thing that impressed me about the meet up was the sheer variety of people…London is a melting pot and the meet-up reflected that. The FIRE is definitely spreading.

I’ve written before about the benefits of real (not just online) community. Don’t get me wrong, FI forums on Reddit and on Facebook etc can be helpful sources of infotainment. But, when it comes to community, online is no substitute for the real world.

Other people are a rich source of ideas, information, love, friendship, support and inspiration. One way or another, all your income comes from other people. It comes from bosses, customers, clients, colleagues, employees, contacts and friends. The better you can deal with other people, the richer the life you lead.

No man is an island and even shy people need connection. Why do guys (and yes its usually guys) agonise in isolation over key life decisions or challenges they are currently facing? Why not talk it through with other people that have experienced the same issues? Every challenge you currently face, someone else has faced before and figured out successfully.

After the photos from the meet-up were posted on the London FI Facebook group, some wag suggested that we should’ve all been at home rather than drinking expensive alcoholic drinks and enjoying ourselves.

I think they were joking. But, as often happens, the joke reveals a truth. Maybe in the FI world we sometimes cross the line between frugal and cheap? Perhaps a lot of people don’t naturally see themselves as FI-seekers because they don’t like to be thought of as “tight”, “cheap” or “mean”?

There is a line between frugal and cheap. They’re not the same thing…and its not just a question of degree. In my book, going to the pub (rather than a posh restaurant) for a drink can be frugal. Not having a social life to save money is cheap.

You have to enjoy the journey

I wrote about this in Get Rich with The Process. On my way to financial independence, I did whatever I needed to do to make the journey sustainable and enjoy it as much as possible.

Yes, there were struggles along the way. I lost count of the late nights in the office and the arguments discussions with my wife about spending. But there was no deprivation.

I used conditional rewards along the way: survive the week, make money, earn drinks!

Focus on value not price

Price is what you pay, value is what you get.

Apparently a pint of coke cost £3.55 in the pub. So £3.55 is the price. Now, its certainly true that person could have got a bottle of coke from a supermarket and drunk it at home for less. It’s also true that they could have drunk fizzy water and got a healthier version, lower cost alternative.

But this is small beer. £3.55 is not a lot to spend on an evening out in London. And its nothing compared to the value you might get. If you meet interesting people that inspire you to stick to The Path and achieve financial independence, that’s priceless.

Financial independence is not (just) about money


Financial independence is about optimising for happiness.

It would be a mistake to cut yourself off from the rest of the human race out of a desire to hoard money. That’s being a miser.

But it happens. Stories like that of Scrooge in A Christmas Carol are classics because they deal with themes that are universal across time.

Money should a means to an end (e.g. freedom, security) not an end in itself.

Focus on quality

Quality sometimes looks expensive…but offers the best value. This applies in all areas of life.

When it comes to possessions, have less stuff but better quality stuff. Think artisan quality rather than mass-market tat. Quality lasts.

In your career, focus on quality. Quality wins whether you are going for promotion or marketing a product or service in a competitive market. Over time, quality eventually prevails. Quality people attract other quality people.

In my investing, I focus on quality. I don’t buy junky companies no matter how cheap they might look. I don’t buy sub-prime debt (often re-branded as peer to peer lending). That’s like picking up pennies in front of a steam roller.

Don’t scrimp on knowledge

The best knowledge is priceless.

If you’ve ever read my list of life-changing books and ummed and ahhhed about whether to buy one of the books, then you’re doing it wrong.

If you can’t get it from your library, just buy the damn book. Reading the right books is the ultimate life-hack. Nothing else provides such an incredible return on investment.

Scrimping on books, training and knowledge is for losers.

Invest in yourself

Avoid a poverty mindset where you just focus on hanging on to what you’ve got.

Don’t be scared to spend money to make more money, get more value and more life experiences. Invest in yourself. This is a growth mindset.

I remember Alan, one of my early financial coaching clients and founder of The Pop-Up Business School, telling me that he and his wife had booked to go to the FI chataqua in Ecuador. One reaction would be that that was a lot of money to spend for a holiday.

But Alan went and met Mr Money Mustache and ended up running one of his excellent (free) classes on how to start a business in Longmont, Colorado. Alan’s business is thriving (deservedly so) and there are now plans for more Pop-Up business schools in the USA. That was an investment that paid off. As well as a great life experience.

Experiences are better than stuff

What have you got at the end of your life? Just a bunch of memories and experiences.

Humans are terrible at accepting this truth. Always have been. Go to The British Museum (its free) and look round the Ancient Egypt section. The Ancient Egyptians stuffed the tombs in the pyramids full of bling that the Pharoah could use in the afterlife. That’s materialism gone mad.

You can’t take stuff with you and you shouldn’t even want to. It’s better to travel light. The less stuff you have cluttering up your life, the better. Use cloud storage for your possessions.

Get rich with soul

Seek out community activities that feed your soul. Small is good, local is good. This is one reason why I love Parkrun.

If that sounds a bit woo-woo for you, let’s put it another way. You shouldn’t really be paying big corporations to entertain you…that reminds me of factory farming…where you are a chicken.

Compare 2 forms of large-scale paid entertainment. You can either go to Disneyland or you can go to a festival like Glastonbury. I’ll take Glastonbury every time…even if both had Mickey Mouse headlining. That’s because Glastonbury is run by a farmer (not a big corporation).

Like I said though, small is beautiful. So personally I prefer the Latitude festival to Glastonbury.

Where are you on your journey?

If you have credit card debt, you shouldn’t be buying be buying Mojitos in Ibiza. In the immortal words of FI-legend Fergie, speaking at an earlier Meet Up:

If you ain’t got no money, take your broke ass home.

Unfortunately, no one wants to tell millennials this…just in case someone’s feelings get hurt and an angry mob of peasants with pitchforks and torchlights forms on social media.

If you’re young / broke / new to FI, then the more subtle differences between being frugal and cheap don’t matter…if money is leaking out of your life like blood out of a neck wound in Game of Thrones, you need to plug the fucking leaks. This is an emergency.

But later, after you are financially secure, you can spend freely on things that don’t harm the environment and which bring you pleasure.

Don’t scrimp on your health

If you want to set The Escape Artist off, tell me that you have an injury but, to save money, you haven’t gone to a physio. Or that you went and sat in a shopping centre just because you had a shop voucher for free cake. Arrggghhh. Noooooo!!!!

Your health is THE most important asset you have. Bar none. Do not scrimp on your health.

Reasonable people can reasonably disagree on most things. But if you disagree on this, then I’m going to have to fight you. It’s for your own good. As the owner of a bar I was in somewhere in middle America once said (in an accent straight out of The Dukes of Hazard):

Them’s The Rules. Them’s the only rules!


  1. millennials. take out a home equity line of credit for some avocado toast and some yoga classes. it’s de rigueur….oh, and rose’ wine. quality does matter. i was just writing about my favorite ice cream company getting bought by a soap conglomerate and turning my favorite dessert into a chemical blob without warning. that was sneaky.

  2. Gutted I missed the meetup! And I don’t think I can make the next one – will be doing 3 peaks challenge with work that day – but if it falls through for any reason I will definitely pop along for a few sherberts.

    What’s all this talk of coke for £3.55 in a pub? Haven’t bought a coke in a pub since I was about 17 (and even then it probably had vodka in it) 🙂

    Agreed with all of the above but I just can’t turn down free sugary treats, or free beer for that matter (wouldn’t go out of my way to get one, mind). I know it’s bad for me but I try to make up for it in other ways such as eating healthily in general, running and other exercises, so I think on balance I’m all good, as my last health assessment confirmed!

  3. I spent $44,000 to climb the highest mountain in Antarctica. Probably not cheap (nor frugal 🙂

    But I waited till I was about 90% financially independent. There’s a balance. I didn’t skimp on things I liked before that either, I was frugal where it mattered.

    Great post as always!

  4. “Focus on value not price” – The big aha moment! And value changes, sometimes just based on the environment. I’m not spending that much for a Coke at a theme park just because plain free water wasn’t brown and fizzy enough, but I might at a gathering with friends.

    If it’s really important to -you-, then spend the money. The problem is everyone thinks everything is important. Most of it isn’t. Every dollar…or calorie…can be used on something you like, or something you LOVE. Like climbing Antarctica vs buying a BMW.

  5. Shame I missed it, looks like you guys had a good time! There’s always one who complains about the prices!

  6. Fatbritabroad · · Reply

    Health is a good point. I’ve just gone and had a health check following the death of my cousin at 51. Little point spending all your life building up a pot of money to drop dead with the finish line in sight. I do have a tendency to get obsessive about finances but even then I still travel alot. Life is about experiences and memories not stuff. I won’t ever scrimp on travel and want to do more in the future

  7. Thank you for organising Barney/Ken. I had a great time meeting people. I didn’t get a chance to speak to everyone (as there were so many people!) including both you and Ken. See you next time.

  8. A really enjoyable meetup! Loved the variety for sure.

    I think your post is filled with alot of wisdom. I can’t emphasise enough the importance of doing life with other people. There is really no life without other people.

    The point about not scrimping on knowledge is of huge importance. There is no greater investment really than on human capital. I personally force myself to spend about £50 a month on stuff that enhances my knowledge and personal development, and I can certainly say it has made be a better person.

    Thanks for such a great post!

  9. ” If you want to set The Escape Artist off, tell me that you have an injury but, to save money, you haven’t gone to a physio. Or that you went and sat in a shopping centre just because you had a shop voucher for free cake. Arrggghhh. Noooooo!!!! ”

    Had a talk with my new rental neighbour, who’s come back into the same rental home after a 4 years hiatus, having already lived there for 2 years.

    He’s now back in the same property (4 years later) with yet another woman again. Got in the rental the first time just after his divorce, coz he needed another place to sleep. He then got up with a divorced brunette with her baby kid while living in the rental, they got together in the rental, then left the rental with her coz they couldn’t afford the 600 euro per month fee anymore. He came back 4 years later with yet another this time blonde divorcee, with 3 kids on her own. He now pays 720 euro per month (+20% more than the first time, after only 4 years=5% inflation per year). Thus still renting around, for at least another minimum 2 years. When interest rates on mortgages have NEVER been lower (now 2% net at the bank for mortgages).

    Had to restrain myself during the welcome ‘con-versation’. Told him in my very direct style, with a big smile, that hopefully this time, he would use the 2 years rental contract period to look for and buy a home that fits his ‘needs’ and has a bank mortgage that’s lower than his rental fee, given that banks are now lending for almost free, and this is now or never to move from addicted renter to temporarily addicted bank mortgage payer. And since he was living in this rental for the second time, and in total for now at least 4 years, maybe he could purchase it? Or some similar sized property somewhere in the area, like the previous renter just did, he now paying 480 euro per month to a banker instead of 680 euro per month to the proprietor, thus saving 200 euro per month, while living in his future own home.

    Got the reply that that he didn’t like the set-up of this house enough to live in it for the rest of his life, he+ his 2 sons, her with her 3 kids, all together in the home, given that he would need to adapt it too much, etc etc, and fuck around the real problem.

    I told him in my very direct style that if he was willing to spend 720 euro per month to live 4 years in total in a rental home that really didn’t match his needs, he might as well live 10 years in a home that didn’t fit his needs but then pay a banker to get ownership of the home after a decade, instead of forking 720 x 12 x 10 = 86 000 euro to various rental property owners down the road in that time, and ending as still being a renter of home’s that didn’t really fit his needs. It told him that he now had 2 years (the minimum rental contract period) to find himself a mostly fitting alternative for him and his 6 ‘partners’, and that he would be very smart to use the low bank mortgage rates while they aren’t as high as in my time (near 9%) or my parent’s time (near 14%)…

    Got a blank look back. Didn’t percute. He’s in his early thirties, and probably a pure product of the brainwashed no calculus receiving live it well generation that I see everywhere I look around here. I think this guy is well on his way to some serious issues down the road, if he ever loses his job or worse, gets costly health issues + loses his job.

    Luckily for me, the empty rental home on the other side of my property just got sold to a new owner, and he is also from the same generation as the renter I just told about. But this man is an independent trader specialised in home renovations and upgrade works. He is slowly but surely turning a very molested decaying property into a definite gem during his spare time, which makes me say that all is not lost in the world concerning the next generations, since I have 2 opposing example on how they do things, just by looking at my 2 direct neighbours.

  10. siouxchief · · Reply

    How does this work with holidays? Like for example this summer I was fortunate to go to Bora Bora which for me was hands down the most beautiful place on earth. This obviously cost a lot but how could someone justify going back to Bora Bora again if they were trying to save constantly.

    Granted a trip to Spain is nice enough but nothing compares to places like French Polynesia but it breaks all the rules around being too extravagant after retiring. Should we be really ruling out the opportunity to visit these places which unless you are a millionaire a person would really need a job?

    Is retiring early really only for people who like simple pleasures?

  11. […] what you pay, value is what you get and the two can be very different. I’ve written before about the difference between frugal and cheap. It makes no sense to be penny-wise and pound […]

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