It’s a sign of intelligence to be able to hold 2 seemingly inconsistent ideas in your mind at the same time.
The curse of the internet is binary thinking: where people cling to simplistic dogma as if there were no complexity, no nuance and no alternative view that could be held by reasonable people.
Sometimes we have to choose between alternatives: either we vote for party X or party Y. In these situations, binary thinking helps spur us to action and resolve uncertainty even if its wrong.
For example, it encourages us to vote if we think political party X is full of wonderful kind-hearted people and political party Y is full of evil people that drown kittens. People that think that are clowns…but it will encourage them to vote.
Sometimes we have to choose between 2 alternatives. But other times you can have both. You can eat strawberries and cream. You can be in favour of women and men. You can be in favour of capitalism and social justice.
And so today I want to talk about the virtues of living local and thinking global, two concepts that might seem as if they conflict but which on closer examination turn out to be complementary for people pursuing financial independence.
One of the ways you get your spending down is by living a more local life. Cars are money incineration units: the more you use them, the more money you burn. The same goes for aeroplanes.
You should be living your as much of your life as possible within walking or cycling range of your house. I live within walking distance of my gym, schools, the train station, post office, a garage, pubs, parks etc etc. I do use my car but everytime I do so, I think of it as if something’s gone a little bit wrong….I haven’t quite managed to optimise my life.
We live in a world where there is no need to go to a shop. I happily buy my clothes from the internet: if it doesn’t fit, I return it. Even if I have to pay for postage, that works out cheaper than the hidden costs of driving to a shop: the cost of your time, car parking, depreciation, risk of accident etc etc.
To cut your spending, you should be replacing costly distant entertainment (e.g. driving to a theme park ) with free local entertainment (e.g. going for a walk in your local countryside or park).
Obviously this depends on where you live but the best situation is where your walks start from your front door. There are several benefits to this. 1.You save time that’s otherwise spent either driving or sitting in a traffic jam. 2. You save money on petrol and lower maintenance costs. 3. You get to know your local area and local people better.
The benefits of this go way, way beyond saving money. By spending time in nature, you improve your happiness and significantly reduce anxiety and the risk of depression. These are the inestimable advantages of living a more natural life.
There is more to The Prison Camp than just office wage-slavery. The Prison Camp represents mass scale, industrialised society. It represents corporatism. It represents conformity and thought control.
So, where possible, I choose small and local over big and mass market. For example, I’m a fan of farmer’s markets. Not because the food is cheaper: it isn’t. But farmers markets have soul. They represent the partial de-industrialisation of the food industry. Yes, economies of scale in the food industry have driven down costs and spread abundance. That’s a good thing. But there have been downsides in terms of the environment, animal welfare etc. Its impractical to expect farmers markets to replace the big supermarkets but they complement them and are a step in the right direction.
The Prison Camp likes us whizzing around, stressed and broke all the time. So The Man’s PR agents on TV encourage this. Take those property porn shows on TV. The worst ones encourage a hapless couple to buy 2 homes, one in the city, one in the country so they can spend their life commuting between them. They’re selling the silly idea that we can have it all. We can’t.
We under-estimate the true cost of commuting. The whole concept of commuting is built on the self-delusion that we can live in suburb A and be painlessly whisked to City B every day without the whole system often grinding to a painful halt when a lorry overturns on the motorway or there is the wrong type of snow. Even when the system works, for me there is something soul destroying about being on the 6.30am commuter train on a Monday morning.
Then there are the property shows that encourage you to buy a holiday house in the sun so you can spend more of your life trudging through airport queues. But only by living somewhere full time do you get the full benefits of living in a community. All the time you’re waiting in an airport lounge, you’re not benefiting from that local community.
Having said all that, we don’t want to be provincial peasants who never leave the village, burn witches and go quiet when outsiders walk into The Slaughtered Lamb pub.
Most of the people you will be thrown together with growing up or at school or college or where you live will be unexceptional people. That’s fine…but the trap is unthinkingly accepting their social norms and attitudes without thinking for yourself. Every culture has its biases and blindspots.
Even if you stay all your life in the place you were born, that’s no reason why you can’t think global. The wonderful thing about the interweb is that wherever you are, you have access to the best knowledge and information in the world.
If I want to listen to conversations with some of the world’s smartest people I listen to podcasts like The Tim Ferris podcast or The James Altucher podcast. There you will hear people at the top of their field being interviewed in search of the reasons behind their success (hint: it ain’t just luck).
Thanks to blogs like Mr Money Mustache, jlcollins and our own Monevator, we can get high quality content on financial independence and investing from anywhere in the world…all for free. Sure, a few of the considerations differ locally. But with Vanguard’s global equities ETF (VWRL) in the UK, you can invest globally with one easy decision.
And did I mention that reading the right books is the ultimate life hack? Yes, I think I did. The beauty of reading these books is that you’re getting the concentrated wisdom of the smartest people from around the world and from any point in history.
The idea of thinking global also provides some clues about one of the most important decisions we can make: where to live. To get to financial independence, you need to do whatever it takes. And that means you should be prepared to move. The world is your lobster.
In discussions about the best place to live to pursue financial independence people often focus on house prices / rent. That’s understandable. But income matters. If you can’t get a job that pays well, its no use living in some rural backwater or post industrial wasteland just because the housing is cheap. The decline of the coal mining industry was a lesson in how important it is to move somewhere where the prospects are better than where you are now.
Remember: earning more is not cheating. And living for a while in a world city like New York or London or Hong Kong is a great way to earn more and think more globally. Those places are melting pots of people with hustle and ambition. Humans are sponges: we naturally absorb some of the attitudes and mindsets of those around us.
When people (understandably) complain about the high cost of housing in these global cities, remember that there are good supply and demand reasons for that high cost. High house prices reflect the greater ability to earn higher incomes (as well as supply shortages).
And if you later choose to sell your city apartment or townhouse and move out, you can release some capital back into your freedom fund. Contrary to popular belief, there is nothing that says you always have to buy a more expensive house everytime you move.
If other people are gonna influence your thinking (hint: they are), why not get influenced by the the smartest / most successful / most sensible people in the world…wherever they happen to be?
Live local, think global.
Reminder! FI London meet up Friday 19 October from 5.30pm onwards in The Old Bank of England pub, Fleet Street. More details here. All welcome. Hope to see you there 🙂