July in the South East is hot hot hot. You would think that spending 8 months in Central America would have prepared us for the heat and humidity of the Carolinas… not so. I’m still melting. Another confession: I never read the classic Financial Independence book: Your Money Or Your Life! I was able to fit it in around the new home renovations and hiking with our friends: some of the four-legged variety that we check out of the local adoption center for a fun day out.
Settling Into Our New Home
We’ve been in Asheville since April and moved into our new house earlier this month. The past 3 months have seen a lot of $$$ flying out the door. Especially now that we are furnishing and renovating our space. I’m certain we’ve met every single person in Asheville by buying their used stuff on Craigslist, and the retired greeter at Lowe’s gives us the ol’ nod when we go in for the third time in two days.
Adding the “buying frenzy” on top of our all-in regular expenses, we’ve been spending roughly $3,000/month. Does that seem low to you? Because it’s 30% more than we’re used to spending. For the first six months of the year, our spending has averaged 3.9% of our portfolio (excluding the house purchase). Our annual target remains 3.0%, so we’re forecasting the expenses to decrease in the next month or two. Aside from the cost of furnishing our new home, most of the money is going into upgrading the value of the house: lots of painting, a bathroom reno, and eventually landscaping with a new deck.
On the up-side, this temporary increase in spending encouraged us to start credit card churning. We decided to get a Chase Sapphire Preferred Card that rewards us for spending $4,000 in the first 3 months with points worth around $700. Having just received our credits, we’re thinking this will cover the cost of our future travel plans… and then we’ll cancel the card and maybe start over.
Whoa, where did all this stuff come from? Our lives used to fit on four wheels…
We set about cleaning the place from several years of renters. There was a beat-up fire extinguisher under the front porch that I was eager to dispose of properly. I took it to a fire services company here in Asheville and after telling the guy behind the counter that I found the extinguisher under the porch of my new home, he asked if I owned a gun. We’ve lived in the US for 7 years now, but this question still throws me off. My Canadian mind thought, maybe he’s concerned for my safety in my new home? Before I had a chance to answer, he followed up with “You know what old fire extinguishers are good for, right? Kaboom!”
The new house has birds up the wazoo. In fact, the multitude of trees up here in the mountains have been awash with amazing bird watching: scarlet red cardinals, yellow finches, sparrows, jays and robins… I love having the windows open to hear them all day long.
Keeping the AC off most of the time is an exercise in our badassity. Something to strengthen our frugal muscles. There is sweet pleasure in seeing how low our utility bills can go. We bought an excellent and cheap floor fan that follows us from room to room instead, and it’s always cooler in our basement. Although, if we’re making a trip in Bruno, he may choose to reward us with a little conditioned air…
Exactly how hot are summers in Asheville? July has daily highs of 85°F (30°C), with varying degrees of humidity. We’re wimps, right? Yeah, we know. It’s gorgeous here!
Hiking and getting out with the incredibly friendly Animal Rescue dogs is a nice distraction from playing house. We definitely still plan to foster cats at home, so hamming it up with the other four-legged kind in the mountains is rewarding for them, as well as fun for us.
Finally Reading “Your Money Or Your Life”
I’ve managed to read a book that I just never found the time for when we were working and saving. Ironic, since we claim to be writing a Financial Independence blog and this book arguably started the “FI” movement. Originally published in 1992 and revised in 2008, Your Money Or Your Life by Vicki Robin & Joe Dominguez is just as relevant today as it would have been when it first came out (I was 10). The book had been reviewed by the likes of MMM back in 2012 and already being on-board with Mustachianism, I never got around to reading it until now.
How to get more of what money can’t buy? Don’t spend your money.
The program was developed by author Joe Dominguez for his own early retirement in 1969 at the age of 31 and has now been used by millions of people globally. He grew up poor and eventually got a job working on Wall Street as a financial analyst.
“All the while, he knew that his goal was to do his service to the money economy in the way young men to do military service – with integrity yet for a finite period of time.”
Ask yourself these questions (I’ve got two or three No’s myself):
I was most interested in the various new ways to explain the concept of Financial Independence to others. Like the time I took a Snowboard Instructor course, just to see how the sport is broken down to be taught. When you teach yourself a skill, it often comes with blunders and stumbles before you master a step and move on to the next. Your Money Or Your Life (YMOYL) outlines 9 clearly-written steps to reach not only Financial Independence, but Financial Intelligence and Financial Integrity. These steps reinforce what many of us in the FI community already know, but it’s pared down into seminar-format exercises. Do these steps over months and eventually years, and watch your life transform. Some great quotes:
“FI is defined as having an income sufficient for your basic needs and comforts from a source other than paid employment.”
FI is “not just rolling in dough. It’s unhooking your thinking from the consumer culture and from assuming you must buy your way through life.”
FI’ers “stop buying their way out of problems and instead use such challenges as opportunities to learn new skills.”
The consumer lifestyle (“more is better”) is not only a drain on your finances, but a strain on the planet. This has become ever-apparent to us, as we fill our home with even the most basic pieces of furniture. Every purchase of a brand-new item not only has a higher price tag than its used equivalent, but it also has an invisible tag that reads: “Total carbon emissions associated with this item due to extraction of the raw materials, manufacturing, and transport is ###. Thanks for your contribution to more droughts, floods, hurricanes, and ocean acidification!”
The book doesn’t go into much detail on exactly why the average consumer lifestyle is unsustainable, other than to say we are exceeding the Earth’s capacity to regenerate resources. I’m thinking that back in 1992 when it was first published, wide-spread understanding on the immensity and seriousness of climate change was not yet widely known.
The truth is, buying most things new is not only more expensive, it’s lazy. This is not to say that we don’t ever buy anything new. We do. Sometimes it’s just necessary. The point is to be aware of what your dollars are contributing to. The old ’90s adage still applies: Reduce, Reuse, Recycle!
It’s not just a financial decision to buy used, it’s the sheer wastefulness of buying new.
We weren’t always savvy. Ten years ago we furnished our entire Calgary condo with new Ikea products and bought a couch on layaway (with enough sense to pay it off while the 0% interest rate ‘special’ was still in place). Travis was out to save the planet way before I was, and his frequent use of Craigslist increased as we moved to its hometown in the San Francisco Bay Area. The metro Asheville area is 15 times smaller than the Bay Area (with no Ikea!) and yet whatever you’re into: Pottery Barn, Ashley Furniture, Crate&Barrel – it’s out there on Craigslist. [Note – desist from purchasing animals on Craigslist]
The book explains that paid employment has two functions or “rewards”: financial (getting paid) and personal (emotional, intellectual, psychological). If the personal reward can be fulfilled with unpaid activities and it certainly can, then you can remove the expectation that your job must fulfill all your needs for “stimulation, recognition, growth, contribution, interaction and meaning”. See your job for what it really is. A financial activity or financial exchange of your time. Unhappiness with work often comes from the expectation that your job is going to fulfill all of your other life purposes. You can be a stellar worker, completely dedicated, (hopefully) trading your hours for higher and higher pay, and all the time knowing, like Joe Dominguez, that it is for a finite period of time.
As much as I liked the company I worked for before we drove off into Mexico, I was struggling with the fact that my identity was linked to my job. How would I “define” myself after I no longer worked full-time? I started challenging myself to ask questions other than”What do you do?” at a cocktail party. ‘Are you into sports?’ or ‘Do you read many books?’ often leads to a discussion on what each of you is reading now, the quality of the local libraries, or a favorite author. Offering up hobbies, pass times, even things you’ve been thinking about doing but haven’t tried yet makes for more interesting conversation than “I’m a (blank) with Company X.” “Oh, that’s nice.” *Awkward silence* (Unless Company X is actually SpaceX, which would be super cool and I would have tons of questions).
“Money is something we choose to trade our life energy for.”
The Your Money Or Your Life phrase to drive it all home. We each have a certain number of life hours allotted to us by the almighty cat gods and many of these are spent acquiring money. Therefore, we should learn to equate money with our valuable time. “Ultimately, you are the one who determines what money is worth to you. It is your life energy. You ‘pay’ for money with your time. You choose how to spend it.”
Another takeaway is that “money is a lien on the earth’s resources”. And in that spirit, don’t go out and buy this book in print! Why cut down trees to read something once? I highly recommend you get it from your local library or as an e-book online. If you want to read it twice, the library will happily store it for you until you decide to pick it up again.
Despite the fact that we’ve already achieved FI, it still felt like an appropriate time to read this book. Which leads me to think that there’s never a bad time to read it. We may have reached many of the financial goals set forth in the book, but there are steps focused on finding a “life purpose” and ensuring your finances align with that purpose. It’s a question we get a lot – but what do you do with your time? The answer is always ‘whatever we want’, but maybe in order to have true fulfillment, we’ll sit down with the exercises in this book and outline what we genuinely want for these next 40-50 years. The possibilities really do seem endless.
Oh, and by the time I finished writing this blog post, Fluffles McGee joined our household. We are proud foster parents of our first fuzzy beast!