Is it Mostly About the Money, or Philosophy and Environment?

I am a member of the MrMoneyMustache Forums. I don’t post much, and try not to read it too much. It’s something of a guilty pleasure. The threads with people asking for legal advice always get me going, but I guess that’s to be expected.

I used to be big into forums back in the day. They still have their place, but I found them to be a gigantic time suck, plus I don’t care for the anonymity, group think, and status “hierarchy” of many forums. They can be a great place to find entertainment, ask questions, learn about a subject, or buy and sell things, but they can also be one big pissing match. These days I prefer blogs because the people that maintain blogs typically put more thought and care into their work product, and there is a greater measure of accountability. So I try not to screw around on forums too much. But I digress.

Whilst trolling the MMM Forums I found this interesting post.

Ultimately, the question here is, “Why practice frugality?” Is it solely means to financial independence, or is there some deeper philosophical or social reason for doing this?

MMM has stated that part of his philosophy is reducing impact on the environment. Others may choose to be frugal for reasons like practicing minimalism, stoicism, vegetarianism, or some other “ism” that I’m not attuned to. If I was handed $10 million tomorrow, would I still cook all my own food, mow my own lawn, drive a Honda, and agonize over every dollar spent?

It’s an interesting question and I thought I might hazard an answer here on the blog.

If I Won $10,000,000.00…

If I won $10M, the first thing I would do is take a break. I would not make any major financial decisions immediately. I am sure after 6 months or a year of reflection, especially in the cocoon of complete and utter financial freedom, my perspective will have changed.

But for arguments sake, I would probably buy a nice house on the water here in Florida. Thankfully, I’m in the part of the country that I like. You can do a lot worse than Southwest Florida.

Lets say I budget $2M or less. That will get you a pretty extravagant place. I wouldn’t need anything big, but would be paying a premium for the location. A nice waterfront lot here will set you back anywhere from $500k-1M+. Hell, maybe I’d build something if money was no option. I like the peace and serenity of the water. I think a property like that would provide value to me mentally.

I would also consider a summer house up north (which I would spend no where near $2M on), and then bank the difference. Say I spent a total of $3M on real estate. That would leave me with $7M. I’d invest the bulk of that $7M in a mix of stocks and bonds (index funds – similar to what I am currently doing) and live off the portfolio. Based on a 4% withdrawal rate that would leave me with around $300K a year gross, which is an absolute shit ton of money. I’d be set for life many times over.

I’d likely quick practicing law. Really it would make no sense financially. My investments would make as much or more money for me than practicing law. Plus practicing law is exchanging time for money. I would already have the money so I’d prefer to keep my time. But that doesn’t mean I would stop working.

I’d like to think I would do a lot of reading, writing, spending time outside, and working on some sort of business. Maybe I would be developing my online business further. Whatever I do, I think it is important to create things, versus to simply consume things. The world belongs to those who ship. I think if I were to turn totally to consumption, and not create something, then I would die a slow death. For me I would probably write. Maybe I would spend some time to do more video, a hobby I enjoyed when I had more free time. I would like to also build something physical. A physical product or develop a more physical skill.

I would probably also do some real estate investing. Maybe buy an apartment complex or some commercial real estate. I’d also like to do some slow travel. The kind of travel where you pack up and fly somewhere, race around to see as much as you can, high the highlights, and then fly home never really appealed to me. I’m doing it now because I run my own business and can’t take the time away. But if I was financially independent I’d take the time to really get to know a place.

I’d very likely spend more than the 20-30k a year I am currently spending. First of all my housing costs would be much higher. I’d probably eat more red meat and seafood than I am currently eating. I’d spend some dough on furniture to go into the house. I don’t think an Italian sports car, bottle service at “tha club”, and flashy jewelry would be on my horizon, but I’d probably buy that Rolex I have always wanted. I am sure there are a few other “nice things” that I wouldn’t turn down. Still, I wouldn’t piss money away.

Basically, this would be my like my current vision for financial independence, yet scaled up slightly on the real estate front. I’d have a nicer house, a place to stay when it gets hot as hell here in Florida, and maybe travel a little more exotically.

Why I Really Do This

My main goal is financial freedom. The ability to tell everyone to fuck right on off. Growing up I never cared for school. I am reasonably intelligent and was able to get buy without too much brown nosing or hard work in high school. In college, I more or less got my ass handed to me in pre-med. If I didn’t transfer to business school, my grades would have been an embarrassment, and I would have never gotten into a decent graduate school. In law school I straightened myself out a little, buckled down, and ground it out for 3 years. I walked away with a B average. But I never enjoyed any of that. I like learning things, but becoming a professional test taker was never my bag.

I never particularly enjoyed working for other people either, and was always relatively lazy in all my jobs. Self employment turned out to be a blessing in disguise as it motivated me in ways going to school or working for others never had. So my main goal in “practicing frugality” is to achieve independence and not have to answer anyone. I enjoy practicing law, but I can see that this is a hard field. Especially divorce law and civil litigation. It’s a grind and big game of Tetris. If you don’t stay on top of things the pieces will come flying down on your head. I have already seen people have nervous breakdowns and become alcoholics. This profession is high stress and high pressure. Self employment and the business of exchanging time for money is tough, and I don’t want to have to do that for 30+ years. If I reach financial independence and want to continue to practice law, then that’s great. But I want to be able to walk away if I want to, or be able to practice on my terms.

I also like frugality. It has simplified my life. It has shown me that there is another path to building wealth that doesn’t require that I make $500,000 a year. It has shown me a different way to view the world. I view the trappings of wealth much differently now than I did even a few years ago. I call it the “practice” of frugality, because I view it as a practice. I haven’t mastered this discipline. I work at it, and am tested by it every day. I have managed to embrace it over the past couple years, but I am still a material girl in a material world. I could always spend less money, I still like nice things, and I still have the desire to spend and consume. Thankfully I’ve been able to stick with saving more than I earn. I am saving now so I can have options later. I think it is especially important to save now because I have few needs as a single 31 year old man, and time is on my side. If I can continue to live like a student now, I can live like a king later.

Also, I readily acknowledge that I have an ego. I want the power that being financially independent brings. That is the ultimate rip cord. I am hot headed, impulsive, and insecure. I have to remind myself on a daily basis not to compare myself with others. To focus on the path head. We are all on the same road, just at different points in the journey. I need to put one foot in front of the other.

The environment, and being frugal for the sake of being frugal, aren’t primary motivators. I do care about the environment. I try not to waste things unnecessarily. But I’d be a liar if I said that is why I am doing what I am doing. I think that the practice of frugality has taught me lessons. And I hope that I don’t lose sight of those lessons as my net worth and income grow. While I readily acknowledge that I am not a frugal monk, and have material desires, I also don’t want to pursue money just for the sake of spending it.

Money can’t buy happiness. I just read Mike Tyson’s autobiography (excellent, but you have to have thick skin as 90% of the book is a drug and prostitute infused train wreck). That man squandered every last sent of his $300M in boxing earnings, and he was miserable throughout the entire process. Money is a tool. It can make life easier, or vastly difficult. You have to work on your mindset and your approach to money. I think it has to be holistic and genuine. Otherwise it slips through your fingers like it does for so many professional athletes, lottery winners, and most normal people caught up in the rat race.

I think of this like guys at the gym. Some guys just go to the gym so they can look better for girls. They focus on their chest, abs, and biceps. All they do are isolation exercises focusing on those 3 muscle groups. But the truth is, to truly develop yourself in the gym you have to work out your entire body. You have to do the core exercises: squats, deadlifts, and leg presses. If you ignore your legs and back, your two biggest muscle groups, you will never reap the true benefits of weight training. You will be underdeveloped. You may eventually get that six pack, but you will never become a fully developed athlete by just doing curls and crunches.

The same philosophy applies to money and wealth. Some people want to appear wealthy, so they buy a nice house, lease a foreign car, spend money on designer clothes, go on exotic vacations, and eat out all the time at trendy restaurants… and post it all on Instagram. They have the illusion of wealth. They have a nice “lifestyle” for as long as they can continue to earn a living to meet the payments on these things, but they have no real financial foundation. It’s an illusion propped up by debt and monthly payments. As Robert Platt Bell says, they have the “trappings of wealth” but no true wealth.

I am here to develop true wealth. That way I can create options for myself and my family. At the end of the day, to me the practice of frugality and the pursuit of financial independence is all about creating options. That is why I am doing what I am doing.

Weekend Update

It has been a few weeks since I last posted on this blog. The nice thing about having an audience of 3 random strangers from google a week, is that no one cares. Still, it has been too long since I last put pen to paper so here are some happenings.

The short answer is that business has been good with both my law firm and my main affiliate website, and my time has been spent there.

Law Firm Update

I have had the nagging feeling all year that my firm has been moving slow. That I haven’t had the case load or made the money this year that I had last year. I have managed to stay busy and pay the bills, but it felt like my bank account was getting slowly eroded and I had concerns about making the quarterly tax payment that I needed to make in September. Well, it turns out I hit a run of nice cases and have been drowning in work. Lots of good stuff to work on, and a healthy amount of stress to go with it.

By and large we have been able to process these new cases. There are always a couple “thorn in my side” cases that are a little strange or require some extra effort I’m not entirely familiar with. Doing things like hunting down witnesses who signed an out of state will 20 years ago, or dealing with difficult clients and lawyers on the other side of a dispute. That is part of the game. Thankfully I have also brought in some good “bread and butter” work. Routine cases that I know have a beginning middle and end. These kinds of cases are the lifeblood, and because I have them somewhat systematized, I can have my assistant help with a lot of the drudgery. These aren’t the most intellectually stimulating cases, but they pay the bills.

Regardless I am happy to see money flow into my bank account and promptly flow out to my landlord, process servers, the clerk of court, my employee, the IRS, Comcast, various software companies, legal research, etc. etc. etc… thankfully some of that money will flow towards me as well. I will live and die another day.

I am thankful because my new hire seems to be working out. She is actually handling things with surprising efficiency and low levels of drama. I am pleased to have hired a younger person this time around. There are a lot of positives compared with my former assistants. The only negative is that she lacks experience and I need to provide more guidance as I teach her how to do some things. But the pros outweigh the cons and it’s great to have my staffing issue resolved for the time being. That was a major hurdle for the first half of 2016.

Affiliate Site Update

I have been shoveling content (and $100 bills) into my main affiliate site all year. We have managed to post one article a week, which was something I previously was not able to do. I’d average maybe 1-2 posts a months previously depending on how ambitious I was feeling. Now we have had regular posts, and have sort of built up a following this way. But the somewhat odd thing is that blog traffic was in a slow decline from December 2016. Naturally, when you have a website centered around physical products like I do the holidays will be your best traffic and earning opportunities, but given the relatively massive amount of content I had been adding I found it a little disconcerting to see my numbers continue to slip.

Well I finally saw an inflection point, and traffic seems to be rising again. That’s always nice to see. Especially late in the summer when traffic is at a seasonal low. I am thinking that all those extra posts are finally gaining traction. Each “seed” is growing into a small plant and starting to bear some fruit. It was exciting to see week over week things build, and August ended up being a great month for the site in terms of traffic and earnings. Of course this week we seem to have hit a slump, so who the hell really knows. I’ll just keep my head down, the content coming in regularly, and hope for a nice holiday season. This formula *should* work in the long run. The Google gods are finicky at times, but when your formula is consistency and quality, I know that in the long term this will be a lucrative play.

Investing and Personal Finance

My student loans have been paid in full for a few months now, and I am continuing to slowly build my balance sheet by adding money to my various brokerage accounts (my Roth IRA, SEP IRA, and regular brokerage account). I am also accumulating a little cash as I am not sweeping all of my excess cashflow into a brokerage account. I may end put diverting these funds to a brokerage account, but I am also considering buying an income producing website, or perhaps a piece of real estate if a good enough deal comes along.

The problem with real estate is that my local market has gotten quite hot and nothing really resonates with me from a cashflow perspective, or I’m simply priced out. I’ll continue to save my shekels and keep an eye on things. I am not in a huge hurry. I just got out of debt and am finally adding a few dollar signs next to my name. While I want to make more investments in real estate, I’m not going to do it just for the hell of it – especially in a frothy market. The time to buy real estate was 3-5 years ago. Unfortunately I didn’t have the cash and was wallowing in debt. I need to crystalize my strategy and find the right deal.

Personal

It seems like I am posting more updates here and less actionable content. The truth is I have been burning the candle at both ends. I have a few ideas for blog posts and want to flesh them out further, but have been involved in other things.

I have been reading and watching a lot of sports programming. I am not a big football guy, but really enjoyed HBO’s Hardknocks series. I also watched Netflix’s series on the Arizona Cardinals and am currently reading Mike Tyson’s biography. The psychology around professional sports is fascinating. Although the players and teams have immense physical talent, the mental aspect plays an even bigger role. It’s quite cool to see that, and to see how closely the trainers work on the mental side. It goes to show that we are almost always our own worst enemies. The obstacles we face are mental. I see practicing law being no different from professional sports. It’s a battle either way. We are paid to perform and to make plays. We are warriors in our own ways. Law is the ultimate game and trial is combat. I think a lot can be learned from how professional sports teams train and prepare for their games.

One small example is to put mistakes behind you. If you fuck up a football play, you have to be able to move on to the next play. To put that mistake behind you. You can’t allow yourself to be defined by your failures. Well, you can, but it will only serve to haunt you and bring you down. Instead, you have to learn to be defined by your success. We must learn from mistakes, otherwise we will be destined to repeat them, but to succeed you cannot allow yourself to be defined by your mistakes. Your mistakes can’t become your identity. You have to change that framework and be able to move on, and define yourself by how you have succeeded. So often the volume of our success wildly outstrips our failures, yet it is those handful of failures that we really cling to. It’s OK to learn from mistakes, but don’t be paralyzed. It’s just cool to see that in the context of sports and how that can be applied to real life. There are a lot of little parallels like this that I see in these TV programs.