How we can use filters to better manage how much we spend and make sure our spending has a meaningful impact on ourselves and the world.
In this episode you’ll learn:
- How Stoics found a balance between wealth and wisdom.
- What is the difference between what is elemental, necessary, useful and superfluous.
- What are the filters we can use to spend more wisely.
Letters From A Stoic by Seneca
A Philosophy of Walking by Frédéric Gros
Mr. Money Mustache says Suze Orman has it wrong on financial independence and early retirement – Market Watch
Skin In The Game: Hidden Asymmetries In Daily Life – Nassim Nicholas Taleb
EveryPlate Use code US6
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Early retirement has become a popular dream, especially in the FIRE community, but many are spending too much to make it a reality. In this week’s episode, David Stein explores why the tendency to spend too much is such a large part of our culture. Listen to the whole way through to learn about practical ways we can filter our spending for greater savings and earlier retirement.
Defining the “bare necessities” of life
How much is enough? What should we be spending our time and energy accomplishing? Our spending culture is certainly one constructed upon a foundation of consumerism, but do we really need everything we purchase? David lays out three categories of what we spend our lives’ attaining:
- The Bare Necessities: Backpacking is an excellent way to learn what it means to live off the necessities of life. What we need to survive the elements and live an “elemental” lifestyle is pretty sparse. We need ourselves, materials to keep us safe from the weather and elements, food, and covering. Without the necessities, there is a debilitating discomfort, and we are not able to function properly throughout life.
- Useful Objects: This category is made up of the things in our lives that make tasks easier. Examples include kitchen appliances, furniture, and vehicles. We don’t need them to survive, but they make living comfortable and convenient, and they save us time and energy.
- The Superfluous: Excessive clothing, artwork, trinkets—these all are things we spend an exuberant amount of time and money obtaining, but they don’t actually serve any purpose other than to provide a new experience to our senses. Our vanity and the appreciation of others is what guides our desire to own the superfluous in life.
Creating a joy-filled life
David explains that we actually spend the majority of our money on superfluous things because they often give us pleasure. Unique experiences produce an encounter that gives us pleasure, and we buy superfluous things to recreate that encounter. But is pleasure really what we should be pursuing? Pleasure isn’t easily re-experienced. There is never enough, and to experience greater pleasure, we have to keep expanding the quantity of the stimulus or find new encounters altogether. In other words, pleasure is fleeting. Joy, however, provides more lasting satisfaction.
Joy is found in taking action. It is found in the pursuit of wisdom, of knowledge, in overcoming obstacles and challenges. We find joy in growing. Joy, unlike pleasure, increases with repetition. It is found in acquiring new skills and in applying and sharing those skills. A joy-filled life should be our goal. Instead of spending time and money on short-term pleasure, chasing and creating joy will provide greater satisfaction, without spending as much money.
Using filters to keep from spending too much
One of the reasons we spend too much is that we have unfiltered wants. To keep from spending too much, we need to use filters. Warren Buffett said, “The difference between successful people and really successful people is that really successful people say no to almost everything.” The key is to ask ourselves if what we are spending money on is worth it. Is it a necessity, useful, or superfluous?
Considering how much of our lives are being spent in return for a purchase is another filter. We all spend time earning the money we use to pay for our purchases. Is the purchase worth the part of life it took to pay for it?
Another filter is to ask ourselves what our purchases say about us in terms of our values. What we purchase says something about what we value and believe in. Are we spending our money on things that represent our values? Businesses and companies base what they make off of what is bought. What signals are we sending the brands we buy from? Listen to the whole episode for examples of how to practically apply spending filters to your lifestyle!
Becoming an aware materialist
Materialism is not necessarily a bad thing! What we consume is important, and how we impact the environment and other people through our purchases is a key filter to consider when spending. David explores the idea of “true materialism,” wherein the buyer is truly conscientious about what they are buying. Are we aware of where our purchases come from, who made them, with what materials, and at what cost? Are the employees who made the product compensated with fair wages and treated well? We need to be materialistic in the sense that we understand the pedigree of our purchases and support the companies and products that stand for what we value. Remembering that companies base their production off of what sells, it is vital that we send the right signals and shape our materialistic culture into one that creates beauty and gives life.
Being conscious of how much we are spending is a perfect first step to having enough to retire early. Understanding how much and where we are spending our money can lead us to action—enabling us to save more for the future.
- [0:16] The FIRE movement and how much you need to retire early.
- [1:23] What are we supposed to be seeking?
- [3:23] How do we define the “bare necessities?”
- [8:58] The superfluous things in life are what we spend our money on.
- [11:12] Finding joy vs. chasing pleasure.
- [13:51] Skills to reduce spending in order to retire early.
- [15:41] Establishing filters to lessen our spending.
- [18:51] Rethinking materialism.
- [21:01] There will always be more.