2020-08-11 - The anti-consumerist lifestyle

I live an anti-consumerist lifestyle - one that is focused on maximizing health, time, and money rather than the acquisition of _stuff*.

I live an anti-consumerist lifestyle - one that is focused on maximizing health, time, and money rather than the acquisition of stuff. One could call it life-hacking[1]: how to turn the powerful force of consumerism on its head, and make it work for you, rather than against you. By age 39, I retired and am financially independent[2] (AKA FIRE - Financially Independent, Retired Early), although I do still work (to fulfil non-monetary goals and also to supplement my investments).

=> 1: https://tobykurien.com/i-am-a-productivity-hobbyist-and-life-hacker/ | 2: https://en.wikipedia.org/wiki/Financial_independence

How did I go about doing this? Through "a combination of simple living, anticonsumerism, DIY ethics, self-reliance, and applied capitalism" (from Early Retirement Extreme[3]). If I had to write a blog about how I achieved my current lifestyle, it would read pretty much like this great blog by Mr Money Mustache: http://mrmoneymustache.com[4][5]

=> 3: http://earlyretirementextreme.com/about-the-blog | 4: http://mrmoneymustache.com | 5: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

I was influenced by "The Four Hour Work Week[6]" by Timothy Ferriss (life- and time-hacking), as well as "Rich Dad, Poor Dad[7]", by Robert Kiyosaki (finance), and "The Testosterone Advantage", or more recently "The New Rules of Lifting[8]" by Lou Schuler and Alwyn Cosgrove (health/fitness). I base my life philosophy on the Stoic philosophy, as described in the book A Guide to the Good Life: The Ancient Art of Stoic Joy[9].

=> 6: https://en.wikipedia.org/wiki/The_4-Hour_Workweek | 7: https://en.wikipedia.org/wiki/Rich_Dad_Poor_Dad | 8: https://www.goodreads.com/book/show/48730.The_New_Rules_of_Lifting | 9: https://www.goodreads.com/book/show/5617966-a-guide-to-the-good-life

Note, these aren't affiliate links, these are books that genuinely changed my lifestyle. I didn't understand anything about the world of finance or investing (or the possibility of being financially independent) until I attended the excellent Financial Fitness[10] training course. I've been making progress on the road to financial freedom ever since.

=> 10: http://financialfitnesstraining.co.za/

In a nutshell

Here's an over-simplification of my guidelines to maximizing health, time and money.

1. Health

• This should be priority #1. If you don't have time to gym 3 times a week, you should make time (even if you have to trade off income, i.e. change jobs).

• On a scale of 0 (completely ineffective) to 10 (highly effective), gymming twice a week is about 2, and three times a week is about 7. You are wasting effort if you gym less than 3 times a week.

• Gym should be about increasing your strength (both men and women), not about aerobics or cardio. Leave cardio for the great outdoors (running, cycling). Why strength? Basically, you need to increase muscle tissue to offset the drop in metabolism as you age. Read the aforementioned New Rules of Lifting book for more.

• Strength training is a universal fix for most health problems, and the best (and cheapest) weapon against aging. Don't believe me? Then meet Ernestine Shepherd[11], a female body builder in her late 70's who looks like she's in her 20's!

=> 11: http://ernestineshepherd.net

• A highly effective and simple routine for men and women is the one I follow: Strong Lifts 5x5

=> https://stronglifts.com/5x5/

• Sleep is just as important as diet and exercise, and not getting 8 hours a night can be massively detrimental to your health. I would consider Matthew Walker's book Why we sleep[12] required reading for everyone and potentially life-changing. Also check out YouTube videos[13] for more.

=> 12: https://www.goodreads.com/book/show/34466963-why-we-sleep | 13: https://www.youtube.com/watch?v=_d583swchPA

2. Time

• Time should be priority #2. If you value your time, you will make good decisions about how you spend it. The value of leisure time is not to be under-estimated. The essay In praise of Idleness[14] (by Bertrand Russell) is a good read as to why.

=> 14: http://www.zpub.com/notes/idle.html

• If you're "too busy" to go out for an unscheduled coffee with an old friend or meet with colleagues, then you may need to improve your time management skills. I highly recommend following the productivity techniques described by David Allen: "Getting Things Done[15]" (AKA GTD). Combine this with the "Pomodoro Technique[16]" for maximum productivity. If work still overwhelms you, then consider changing your job/employer or letting your employer know that they are under-staffed.

=> 15: https://en.wikipedia.org/wiki/Getting_Things_Done | 16: https://en.wikipedia.org/wiki/Pomodoro_Technique

• Understand that time and finance are linked together: if you take out a loan for a purchase, you will need to work to repay it, which will rob you of time. Even if you didn't take out a loan, you would reduce the amount of money invested, which would reduce your passive income, which may mean you'd have to earn more money. Bottom line: everything you buy robs you of time, more-so if you have to pay monthly.

• I get asked: "well what's acceptable to buy, and what's not?" That's for you to decide, but I have a simple guideline: I prefer to spend money on lifestyle items (like a bicycle, tent, or guitar) rather than status-symbol items (like a luxury sedan). I also prefer to buy items that get me out of the sitting/lying down position that we spend most of our life in.

• Once you have enough free time, you will start to ponder about how you can live a more fulfilling life. You will finally be in a position to help change the world (or your neighbourhood), learn new things (like playing the piano or why the Solar System is flat[17]), explore the world by travelling, and generally growing as a person. Ultimately, happiness is growth[18].

=> 17: https://www.youtube.com/watch?v=tmNXKqeUtJM | 18: https://tobykurien.com/tobys-pearls-of-wisdom/

3. Finance

• Debt is very bad. You know this, but you may be underestimating it. All debts should be paid off ASAP, because...

• Compound interest you pay will make you a slave to your job (which will ultimately rob you of your time and health). However, compound interest paid to you is the most powerful way to become financially free.

• Compound interest takes lots of time to work, which is why you should start ASAP. You really have to play with the numbers in a spreadsheet to get an intuitive feel for this. Try to follow along with this exercise using your favourite spreadsheet application (e.g. Excel):

• Using first principles (no fancy equations needed), work out what R100 per month saved over 20 years is, using one row for each month:

    | Month   | Saving | Total |
    | ------- | ------ | ----- |
    | 01/2016 | R100   | R100  |
    | 02/2016 | R100   | R200  |
    | 03/2016 | R100   | R300  |

    ...

• Now work out what it is if you earn 15% per annum in interest, i.e.

   total_this_month = total_last_month * (0.15 / 12) + total_last_month + saving_this_month. 

• Now work out what it will be at the end of 40 or 50 years. The numbers become unbelievably big over 50 years, which is why it is so important to start early.

• That's just R100 per month, what about if you saved R1000 per month? Or what if you started with R100 per month, then increased it by R10 every month?  What if you went "all-in" and saved R2000 per month for 15 years, would you then be financially independent (your fixed expenses covered by interest earned)? These are the type of questions the spreadsheet can answer for you, allowing you to set your financial goals realistically, and making it very clear how your spending habits may be robbing you of financial freedom.

• You should now be aware that it is possible to be financially free on a modest salary, but don't waste all those R100 p/m you could have been saving, on things like Dstv or fancy cellphone contracts. Invest it instead.

• The above spreadsheet was a fundamental tool in helping me achieve my financial goals, and for helping me figure out when I can consider myself retired.

• Think you've got a feel for compound interest now? Ok, try guessing this: If I started with R1 today, and doubled it every day for 40 consecutive days, how much would I have at the end of the 40 days?

• Inflation erodes your wealth over time in just as big a way, and is typically higher than quoted by the government (as that is based on bare necessities, but your inflation is based on things like cars, houses, school/university fees, etc.). Inflation is typically higher than the best rate a bank will give you on a savings/investment account. I like to think that it is around 12% (this is much lower in developed countries), so you need to earn more than that to beat inflation (otherwise you are getting poorer!). The good news is that in developing countries, you can typically get greater returns, which is why foreigners often invest in developing countries.

• The best way to beat inflation (as proven over time) is to invest in shares (AKA stocks), unit trusts (AKA mutual funds), and/or property. You could, of course, start your own business too. My preference is shares (good return without requiring much of my time). Surprisingly, shares can also be less risky because of a thing called stop loss[19], which none of the other options have.

=> 19: http://www.investopedia.com/articles/stocks/09/use-stop-loss.asp

• You should learn to invest your money (i.e. buy income-generating assets). An easy way to start right now (assuming your debts are paid off), is to invest in Satrix 40[20], tax-free[21]! With this, a computer (not an emotional human) takes your money and invests it in the Top 40 shares on the JSE. The result[22] (as at May 2015): 16.6% per annum over the last 10 years (despite a global economic collapse). That's a lot better than any bank account.

=> 20: http://www.satrix.co.za/ | 21: http://www.jse.co.za/taxfree | 22: http://www.satrix.co.za/fund-research-product.php?type=ETF&fund=satrixALSI40Fund

• Read the aforementioned book Rich Dad, Poor Dad to get started, and if you can, attend the Financial Fitness training. Another good read is the 3-part how to master your early retirement lifestyle[23]. A great South African book on finance that is accessible to a younger audience (and covers all the important topics) is Manage Your Money Like a F*cking Grownup[24] by Sam Beckbessinger

=> 23: http://www.thinksaveretire.com/2015/09/29/how-to-master-your-early-retirement-lifestyle-part-1/ | 24: https://www.likeafuckinggrownup.com/books/

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