Your stuff or your life?
It always amazes me how many people are prepared to give up a very large chunk of their time on this planet to pay for stuff they don’t need. Today my mum and Dad sold an old coffeemaker on eBay, which they had practically never used. They paid around £90 for it a few years ago, which at my Dad’s rate of pay probably works out at about nine hours’ – call it a day’s – work after tax.
By some poor planning and a bit of bad luck, they only managed to sell the thing for around £20. Minus postage and eBay fees, they actually received a couple of pounds back – a total write-off! But the sad fact is, this wasn’t just a monetary write-off; it was also a temporal write-off. In this case, my Dad had pretty much given up a day of his time on this planet to pay for something he never used.
The sad truth is that in many cases, social status and outward appearance matter as much as the utility or satisfaction we derive from owning stuff.
This sorry situation is being replicated in the households of rich countries the world over. All of us, at some level or another, are ‘consumers’. Most of us don’t even bother to question this paradigm, despite the fact that it is the number one reason why we work our asses off day in day out, in a job that most of us hate (or at the very least would rather not be doing).
We are conditioned to believe that we must have that latest gizmo on pain of being ridiculed at school; or a new car, for fear of losing face with the neighbours. The sad truth is that in many cases, social status and outward appearance matter as much as the utility or satisfaction we derive from owning stuff.
Control those urges!
Impulse buying is one of the main enemies of the aspiring FI. If you suddenly become struck by an uncontrollable urge to buy something, do the maths (yes, maths not math – my apologies to my American readers!). At my Dad’s rate of pay a new computer console costing £400 would take forty hours’ work – more or less a week – to pay for. Is the graphics on the PS4 really that much better than the PS3? Is it really worth giving up a week of your life to pay for it?
A new car costing £10,000 would take a thousand hours (around half a year’s work!) to pay for. Do you really need to grind away for more than a month just to say, “hey look at me”, or to experience that extra level of comfort in the daily commute? An Extension costing £50,000 would take a whopping 5,000 hours’ – around two and a half years’ – work flat out. Do you really need the extra space?
I think if many of us actually did the arithmetic before making a purchase, we’d actually think again. From the point of view of an aspiring FI, doing sums like this is essential in order to make you aware of the implications of the decision, and how far it will set you back. You will be surprised how much you question your own spending habits when you ask yourself:
“How many hours of my precious life will I have to work to pay for this?”