What if making more money is secondary?
I believe it is.
There’s so much focus on investments, crypto, stocks, and even real estate. Real estate will be the death of me. The thought of going into a huge amount of debt, to own some chunk of land where the government can change taxes on it whenever they feel like it, and the maintenance of rent collection, real estate agents and tradespeople — well, it haunts me.
Making more money takes a lot of work. You have to give up your precious time to make more money. What if there’s a better way?
We’ve been led down a dark alley
I grew up being told by my fellow citizens to get a good job. To brag about that job at dinner parties. To buy luxury cars to show my job is going well. To find a romantic partner who also has a good job so we can be twice as rich.
I watched people who were close to me place band-aids over their life by buying dumb stuff like swimming pools.
As soon as they became unhappy, you could guarantee a new possession would find its way into their life. Some salesman was sure to convince them to part ways with their hard-earned money, secretly making them unhappier later on as the debt burden took hold.
I got misdirected too. When the woman I love told me to “knick off,” I found myself drowning in bottomless jugs of beer, looking for an answer. If I couldn’t be happy in real life, then I could be pretend-happy for show. That’s what I did. “Life is great! I made $10,000 this week.” The dollar figure was true, but the fake happiness wasn’t.
Society has accidentally molded together happiness and spending. It’s not an accident. Entire economies are built on fixing happiness with money.
Money and unhappiness are the pillars of capitalism. If everybody thought they were happy right now then spending would plummet. To make you think you’re unhappy is the secret business model of the best companies in the world. The truth is we can never have enough happiness.
What if you did the opposite?
Financial minimalism is the opposite of conventional wisdom.
You spend time to make money. If you spend less money then you have more time. What we secretly want is extra time. We work hard and put up with long hours in the eventual hope we can quit our jobs or work for ourselves.
New stats show 95% of people desire to quit their jobs. There is a job quitting pandemic. When the focus moves from chasing rainbows to the importance of time, financial minimalism becomes extremely attractive.
You don’t need to quit a job or start a business if you lower the amount of money you think you need. Think deeply about that.
The brutal truth about passive income
I’m a big believer in passive income. But plenty of people take it too far. They’re so obsessed with passive income that they keep going far beyond what is necessary.
The point of financial wealth is to buy back your time — not get stuck on a passive income hamster wheel while trying to endlessly inflate a number on a screen that acts like a video game for life.
If life were a video game then the points you want to collect are based on time, not money.
The idea of passive income has played on my mind a lot recently. For example, one of my investments, ethereum, has grown 200% year on year. A few people told me to lock my stash away and earn 8% interest on it. This is a great idea. But what’s wrong with 200% growth? Why go through the extra effort and risk to get 208% growth?
This way of thinking is part of the problem. When you play the money game, not the time game, it’s never enough. I see the same in the stock market. Many investors have made stupid amounts of money in tech stocks. One of my friends is in this category. He’s made millions of dollars from the top ten tech stocks. Now he wants to take out some of the money and put it into crypto.
It makes no sense. He’s made enough money to retire, yet he still wants to take on more risk to make even more money.
There comes a point where more financial wealth is stupid.
The bizarre solution the elites will hate me for
The founder of the startup Gumroad, Sahil, first wrote the quote “You can be twice as rich by deciding you need half as much.” This single sentence provides a blueprint to escape the unhappiness of focusing on money.
What if you didn’t need all the things you buy?
Let me give you some examples. A study found that 68% of our time is largely spent in the kitchen/nook and the family room, typically near the tv. Clearly, the formal dining room got almost no use, and the porch saw very little activity. Most of the rooms in a home are barely used, yet we spend our life savings to finance them. Most of the clothes you have in your closet never get worn. Many of the luxury meals you have out will never be remembered.
What I did is to track all the things I spent money on. I measured how many times the Ralph Lauren shirt got worn. I paid attention to how often I went back to the photos on my phone of a nice meal.
I noticed how most of my possessions never get used. My laptop and iPad are the worst offenders. 95% of my work is done on a desktop iMac. Yet I own all the other devices because my brain thinks I need convenience.
The kitchen is the biggest nightmare. Many of the appliances never get used and are simply there for one-off annual occasions where family comes over to inspect “how we’re doing” (lifestyle-wise) because that’s what our programming unconsciously tells us to pay attention to.
The comment “that’s a nice rug” by your father is a hidden judgment on your finances. Took me a decade to learn that.
Here’s practically how you can become twice as rich
- Buy less tech. The latest model iPhone is almost the same as the last. Use your tech until it stops working. That’s a good gauge of whether it needs to go to the graveyard.
- Make food at home. Most of my meals are now at home. I used to eat 2–3 takeaway meals a day. I sold myself the lie that it saved me time. Really, after all the messing about, it’s easier to simply make a sandwich full of plants at home, than wait in line at a hamburger joint and pay a 300% premium.
- Avoid status symbols. We don’t share how much money is in our bank account. So most people don’t know how rich you are. What the fake-rich do is buy status symbols like BMWs to quietly tell you they’re rich. A status symbol is stupid. Why? Because you can never have the latest and greatest status symbol. If you buy a new Lambo tomorrow, then it will be outdated in about three months. Therefore, you’ve gotta buy a Lambo subscription that requires renewing every three months to hold onto the status. Stupid.
- Choose quality over a brand. Good brands often make rubbish products. Use review sites to find out whether a product is actually good quality, rather than trust an ad that promises the world and ends up in a warranty claim in a few months.
- Track your spending. My partner and I have an excel spreadsheet. Every purchase is tracked. If our lifestyle begins to creep as our investments grow, the spreadsheet keeps us honest and we cut back the next month. When my spending was out of control, I cut back slowly each month by gradually spending 2%-5% less. Over time my expenses hit rockbottom.
Why people hate to have half as much
Some of this you’ve heard before. People often don’t want to decide they need half as much. Why?
We’re programmed to think spending less will disconnect us from joy.
When you spend money it gives you a nice spike in dopamine and feels good. The truth is you’re spending your time away and you’ll pay twice as much for the purchase in the future, in the form of time apart from your family.
That’s why you’ve got to track financial wastage. Once you see all the money that gets wasted, it’s easier to see your true desires. You actually only need half as much because a lot of money quietly goes into the pockets of others for no good reason.
Then once you have nailed the wastage, you can say “do I really need to make this purchase?” I sleep on a new purchase all the time. Often I wake up in the morning and go “nope, I don’t need this useless piece of trash anymore.”
You feel better when you need half as much. The reason is that you get back time, to do whatever you want, and that’s real freedom a new purchase can never give you.