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.

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