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I’m far from a genius. In fact, I think I have a rather pedestrian mind. But I also think I’ve stumbled upon some profound insights in the course of writing this blog. And when one of those profound insights is confirmed by a famous blogger, which happened last week, I can’t resist the all-too-human urge to gloat.
So let the gloating begin.
Egotrage
Many Americans are struggling financially, not because they make too little, but because they spend too much. They could dramatically change their fortunes by adopting one simple strategy: egotrage. Drive a crappy car, wear Walmart clothes, eschew dining out, lattes, and cable television, live in a modest home, or suffer the infamy of having a “menial” job for a side hustle—these are just some of the ways struggling Americans with decent incomes can free up money to pay off debt, establish an emergency fund, or make an audacious financial goal a reality (i.e., retire early, start a business, travel the world, etc.). But in order to do this, our nicely compensated but financially struggling person must subdue his or her ego. He or she must be willing to engage in financial behavior that belies his or her socioeconomic status; that is, he or she must be willing to look like a poor or working-class person in some respect.
Last week, one of the more esteemed members of the FI community, Physician on Fire (PoF), wrote a post about the $90,000 house he just bought. And, no, he didn’t buy the house to rent out. He bought the house to live in with his wife and kids.
Why This Is Egotrage
This is a beautiful example of egotrage for three reasons.
1. PoF is rich. He’s a practicing anesthesiologist in his early 40s who has already saved more than 30 times his annual living expenses. In 2018, PoF’s living expenses for the year amounted to $66,000. This means his portfolio is worth at least $2 million. He has no debt, put a quarter of a million dollars in a donor advised fund, and his blog made over $100,000 last year. Yep, the dude’s got bucks. I consider myself rich, but PoF makes me look like a piker.
2. The price of PoF’s new home seriously belies his socioeconomic status. According to Zillow, the median sales price of a home in the United States is currently $235,500. This means the price of PoF’s new home is 62 percent below that median.
To put this into perspective, I went to Bankrate and calculated the monthly mortgage payment for a $90,000 home with some very conservative inputs (e.g., five percent down payment, highest interest rate option, and doubling the default estimates for insurance and property tax). The monthly payment was $691. If we assume a mortgage to income ratio of 28 percent as our maximum threshold for affordability, a person with a household income of $29,614 could theoretically buy this home ($691 times 12 divided by .28 equals $29,614). A household income of $29,614, in turn, is at the 25th percentile on the income distribution scale. Seventy-five percent of American households make more. So, yeah, when it comes to housing, PoF is slumming bigtime.
3. He slummed on housing because he valued an audacious financial goal more. From what I can gather, PoF wants to do anesthesiology part-time, continue championing the pillars of FI to the medical community, and take his family abroad for three or so months every year. A big monster house befitting a successful doctor/blogger would only complicate the pursuit of these goals. Would you want to own a big monster house knowing it would be vacant for a good chunk of the year? I wouldn’t. And neither does PoF. He’d rather have a perfectly adequate but unglamorous home—which his $90,000 home surely epitomizes—and devote his time, money, and energy to the things he really values.
Egotrage Is the Answer
When PoF reflects on his life many years from now, do you think he’ll regret not sheltering his family in the best damn home he could afford? I doubt it. Call me nuts, but I think he’ll look back at the time and adventures he had with his wife, children, and grandchildren and conclude that he is one of the richest people to have ever walked the earth.
Now I have a question for you. If PoF can “demean” himself by living in a working-class person’s home, why can’t you—get the smelling salts ready—”demean” yourself by living in a trailer? After all, wouldn’t egotraging to a single-wide, providing you’re currently bearing the costs of the typical middle-class home, dramatically lower your housing expenses and allow you to save a boatload of money in a relatively short time (5 to 10 years)?
If I said it once, I’ve said it a thousand times. Egotrage is the key to making an ordinary person rich. Thank you PoF for proving this groovyism, for showing a skeptical world that the easiest way to soar financially is to humble yourself socially.
Quick aside. While I was writing this post, I came across a YouTube video that nicely echos my faith in the power of egotrage. Check it out.
Final Thoughts
Okay, groovy freedomist, that’s all I got. What say you? Do I have reason to gloat? Is egotrage—a name I coined to promote strategic slumming—clearly something your everyday American can use to advance his or her financial fortunes? Or am I a delusional jerk? Let me know what you think when you get a chance. Peace.
Never heard the term Egotrage before but I love it!
I read POF’s original post on his new home and agree with you that he has his priorities straight.
He is doing things most doctors don’t and thus is able to live a life (for the better) that most doctors don’t.
If your lifestyle is costing you money with the sole purpose of “fitting in,” “looking the part,” or impressing your peers, you will never have enough and your burn rate will be incredible.
Those things feed your ego and can be your downfall. Take it down a few levels in “egotrage” and you will be wealthier in more ways than one.
xrayvsn recently posted…Food For Thought: Boom Goes Your Retirement
“Those things feed your ego and can be your downfall. Take it down a few levels in ‘egotrage’ and you will be wealthier in more ways than one.”
Beautiful, my friend. I couldn’t have summed up the essence of egotrage better. Bravo.
While having dinner with some “high earning” friends this week I held up their plastic-but-sturdy novelty cup (filled with sweet delicious water) with Transformers on it and said “Happiness is drinking from a plastic toy cup…that you don’t yet own”. I have my collection of cups from Dickey’s BBQ and Zaxby’s Chicken. But not a sweet Transformers cup! The benefits of knowing wealthy people…
Meanwhile, we received some Tiffany champagne flutes for our wedding 16 years ago. Some day we’ll open the box, get them out and use them.
Haha! Funny you should mention champagne flutes. Mrs. Groovy and I got some for our wedding too. We took them out but never used them. They’re sitting in our garage somewhere now. We also got a bunch of foo-foo vases that we never used as well. We’re finally trying to sell them on Craigslist. No bites yet. Thanks for stopping by, Ron. It’s also great hearing from a fellow egotragist. Cheers.
we’ve never really cared how we are judged in the chateau smidlap. we can look in the mirror and know who we are and how we treat people.
all that being said i could probably stand to shave a little more often and look a little less homeless.
freddy smidlap recently posted…Help! My Crystal Ball is Broken!
Chateau Smidlap–where the inhabitants are slightly rough on the outside but beautiful on the inside. I love it!
Nailed it, Mr. G.
The sooner people stop giving a f#ck about projecting illusions of wealth, the sooner they can actually become wealthy.
(I recommend a great book by Mark Manson called The Subtle Art of Not Giving a F*ck.)
“The sooner people stop giving a f#ck about projecting illusions of wealth, the sooner they can actually become wealthy.”
Wow. This humble little post is attracting some of the finest wisdom I’ve ever seen.
Dave Ramsey has a catch-phrase that captures the spirit of egotrage: Live like nobody else so you can live like nobody else.
This is probably the best treatment for people trapped on the treadmill of hedonic adaptation. After you grow adapted to a particular standard of living, you imagine (& are tempted by) improving it a little bit. So, let’s purpose to do the opposite so we can enjoy the pleasure of advancing a financial goal instead.
“This is probably the best treatment for people trapped on the treadmill of hedonic adaptation. After you grow adapted to a particular standard of living, you imagine (& are tempted by) improving it a little bit. So, let’s purpose to do the opposite so we can enjoy the pleasure of advancing a financial goal instead.”
Man, you got an exquisite mind. What a great way to describe the meaning of egotrage. I humbly salute you, sir.
I love how you featured Beat the Bush – he’s one of my favorite YouTubers 🙂
I like the phrase “egotrage” much better than “poverty tourism” which I’ve seen thrown around.
BTB is a lot of fun. I don’t get to his channel very often, but when I do I always learn something. And thank you for introducing me to the term “poverty tourism.” I never heard of that before. And the articles that came up in a search of the term didn’t look upon it favorably. They described it as very voyeuristic, very unethical. While if these articles defined “poverty tourism” properly, “egotrage” is a much better term and concept. Thanks for stopping by, Kim. Cheers.
My first home was a single wide trailer, very used, that I spent all of $5,000 to buy. That was 40 years ago. I’m still living in the second home we bought, a regular (modest) house. I never felt we were slumming, we have always lived well, while still living frugally. We just never saw ourselves through the window of what we owned, but as who we were as people. I know some of our friends were puzzled by us. But we no longer work for money and have much more than they do. They still have to go into work every Monday morning, neither of us has done that in years.
Steveark recently posted…Volunteering is Meh
“We just never saw ourselves through the window of what we owned, but as who we were as people.”
Your whole comment gave me a tremendous CMLT, but that one sentence really resonated with me. You’re a very wise man, my friend.
Mr. G, I love the term “Egotrage”, it’s just right on so many levels. I smiled when I saw PoF’s announcement of his house a week or so ago, he’s certainly setting a great example. Walk The Talk. It’s great that you wrote a post about it, this is an action that deserves some attention. I also smiled when he told his story about moving himself with a trailer he bought for the occasion – we did the same thing when we moved from Good To Great, and I could picture him schlepping his stuff from MN to MI. You go, Doc. Your future is bright!
Haha! I love it. Egotrage. Good to great. For two simple country bloggers, we come up with some very worthwhile concepts. Hope all is well at World Headquarters. Talk to you soon.
Go, egotrage!!!! We are…… budding egotragists. We need to step it up in terms of quitting eating out (or at least cutting down) and potentially in the housing area too. We’re working on it. 🙂
My first successful egotrage was when Mrs. G and I decided to go to White Castle for Valentine’s rather than a fancy restaurant. At first, we were a little embarrassed. But the more we dug into our little greasy square burgers, the more we embraced the concept of egotrage. We were saving money and being subversive. And it felt great. Egotrage will never let you down. Good luck in your efforts to become unabashed egotragists, Laurie. You’re the best. Peace.