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Not much to report this week on Groovy Ranch. We got our builder, Terry, and now we’re just formulating a contract. Terry gave us a boilerplate contract to review and we’re basically satisfied with it. There are just a few things that we’re not comfortable with. The lawyer who handled our land purchase is addressing those concerns now. But I don’t anticipate any major sticking points between us and Terry. I’m sure we’ll have a signed contract by the end of the week.
How To Be Less Spendy Continued
Okay, Update 19 was rather short. Only 81 words. And I feel very bad about that. What kind of blogger submits a post of 81 words and calls it a day?
So to fulfill my obligations under the Don’t-Be-A-Jackwad-Blogger Pact ratified at FinCon 2016, I decided to riff a little more about ways to be less spendy. If you don’t recall, in my last post I came up with two strategies to fend off the siren call of materialism: strategic ignorance and strategic aloofness. Well, now I got another arrow for your quiver. Here we go.
You’re Richer Than You Think
For most Americans, especially those who are struggling financially, the notion that they’re rich is hard to fathom. After all, nearly half of American adults couldn’t come up with four hundred dollars in a pinch if they weren’t allowed to sell something or borrow the money. That statistic doesn’t exactly scream widespread wealth. But Americans are rich. Consider these statistics from the Global Rich List, a website created by an outfit called Poke.
- If your annual income is $10,400, congratulations. You’re only making a subsistence wage as far as the federal government is concerned, but you’re in the top sixteen percent of all income earners in the world. (Note: $10,400 is the federal poverty level for a household of one in 2008. You’ll see why I used this amount below.)
- If your annual income is $13,745, super congratulations. You’re in the top ten percent of all income earners in the world.
- If your annual income is $32,400, mega congratulations. You’re in the top one percent of all income earners in the world.
Are these statistics valid? Good question. Poke based these calculations on a World Bank survey of household income conducted in 2008. Comparable 2018 incomes for the sixteen-, ten-, and one-percent thresholds would be $12,140, $16,044, and $37,821, respectively. So while the statistics behind the Global Rich List are a bit stale, and while the accuracy of the World Bank survey they’re based on is surely short of immaculate, I don’t think they’re wildly off. In other words, they pretty much sum up the human condition on this planet and the benefits of being born an American. You make a poverty-level wage here in America and you’re doing better than eighty-four percent of the world’s working stiffs.
But lest you think I’m being far too credulous when it comes to the Global Rich List, I’m going to throw another statistic at you.
Nearly half the people in India don’t have access to a toilet. This means roughly 600 million Indians relieve themselves in the street or in the field.
Is it any wonder why so many people in Asia, Africa, and Latin America want to come to the evil, capitalist, racist United States of America? To most comfortable Americans, especially those residing in our richest cities, a guy living in a trailer in Mississippi making ten dollars an hour is someone to be scorned or pitied. But to most of the world, that Mississippian is someone to be envied; he’s living like a king.
Strategic Participation
Okay, the typical American is rich by world standards. What’s the point? The point is that you’re more than likely playing a game you’ve already won. If you meet or exceed the living standards of our trailer-dwelling Mississippian; that is, if you eat three meals a day, own a closet full of clothes, and reside in a climate-controlled home with running water, electricity, and an internet connection, you’ve won the material game. Getting bigger and better necessities, or surrounding yourself with ever-greater amounts of toys and gadgets, doesn’t really accomplish anything. You’d still be a winner without all those fabulous upgrades.
Now a question. If you’ve won the material game, why do you keep playing it? The home team in baseball doesn’t bat in the bottom of the ninth if it has more runs than the visiting team. Doing so would be idiotic. The home team has already won the game. But a lot of Americans playing the material game are incapable of such rational behavior. They’re way ahead when the bottom of the ninth comes around, but they insist on coming to bat and taking more swings. Winning with a a ten-year-old functional car isn’t enough. They have to win with a brand new SUV that can park itself and locate the nearest goat yoga class. Winning with a degree from the local junior college isn’t enough. They have to win with a degree from an out-of-state mega-university that costs $70K a year to attend and operates a top-ranked, minor-league football team. Winning with a 1,500 square foot home isn’t enough. They have to win with a 3,000 square foot home that features, among other things, 10-foot ceilings, Brazilian tigerwood floors, and a newfangled faucet that releases its watery bounty with the wave of a hand. It’s freakin’ insanity.
Don’t be like the typical American. Practice what I like to call strategic participation. Stop devoting your energies to the game you’ve won, and start devoting your energies to a game you haven’t won and is far more consequential. Forget the material game, concentrate on the freedom game.
To win the freedom game, you need a portfolio of stocks and bonds that is equal to twenty-five times your annual income. And you can have that portfolio in less than two decades if you save 40% of your take-home pay. But if you continue to play the material game, the freedom game is lost. It’s your choice. Keep playing the material game, live paycheck to paycheck, and work like a dog until you’re 70. Or, stop playing the material game, invest the savings, and laugh at all the schmucks battling the morning commute while your 40-something ass is lollygagging in bed.
How To Focus On The Freedom Game
The best way to practice strategic participation and askew the material game in favor of the freedom game is to be constantly reminded of your material wealth. Nothing dulls the need for the latest iPhone more than the realization that 300 million children in the world lack shoes. Here are two ways that I managed stay focused on the freedom game until I reached financial independence.
- Read history. Read about how people lived prior to 1950 and you’ll marvel at your good fortune. Read about how people lived prior to 1900 or 1800 and you’ll really marvel at your good fortune. Here are just some of the historical reads that helped me realize that materialism is an empty pursuit.
- Watch how people in the developing world live today. I don’t recommend doing this on a daily basis. It’s too sobering. But it’s something you need to do every month or so to keep your covetous tendencies in check. Here are some suggestions.
Final Thoughts
Okay, groovy freedomist, that’s all I got. What say you? Did I fulfill my obligations under the Don’t-Be-A-Jackwad-Blogger Pact and produce a worthy post? And what about strategic participation? Is that a legit strategy? Or has this blog finally jumped the shark? Let me know what you think when you get a chance. Cheers.
Ooh I love Idiot Aborad. He really is the Homer Simpson of the UK.
“If your annual income is $32,400, mega congratulations. You’re in the top one percent of all income earners in the world.”
How lucky we are to have landed on this part of the big old rock…..
I think Carl is most adorable when he curses.
Some really great points here Mr. Groovy, we’re so well off and it’s important to remember that on a daily basis. The baseball analogy is perfect, why keep playing if we’ve already won? No need to compete with the people around us.
I saw “Living on a Dollar a Day” and it was very well done, it really makes you think.
I don’t know what makes some able to stop playing the game (when they’ve already won) while others cannot. We’re reminded daily of our freedom when we drive the 5 minutes to our walking path. If we look to the right or the left, we see drivers who are stressed out on their way to work.
My friends have called me jackwad my whole life, so I’ve got that going for me. Plus my toilet.
More seriously, you’re right. Nat Geo did an article recently about a huge effort to teach people in India that pooping in a field of grass in plain view is unsanitary and spreads disease rampantly. It was an interesting and depressing read. It’s a HUGE issue there, and it’s really sad. Gratitude indeed.
I never knew we had so many jackwads in our community!
We’ve pretty much had “his” and “her” toilets since moving to North Carolina. I think that makes us very rich — and certainly very grateful.
Thanks for pointing out that Nat Geo article. I’ll look for it.
It’s kind of sad that gratitude and contentedness don’t come automatically with all that we have in this country (with the understanding of course that some of us have more than others). I can be as guilty as anyone else in forgetting to be grateful, and that’s why those reminders about the developing world (and even our own country in the past) are so important.
Strategic participation is a very elegant name for pursuing freedom instead of material things, and that alone makes it a worthy post. Plus, any time you throw in a baseball metaphor, I approve!
Gary @ Super Saving Tips recently posted…Surprise! You’d Never Expect These Online Bargains
So you like the strategic participation term? My husband comes up with a good one once in a while!
I can be just as guilty, too, about lacking gratitude. Why is that? Are we so jaded by TV commercials? Do we need more of a religious education to practice gratitude? I honestly don’t know. I can read about and think about gratitude, but it doesn’t come automatically.
About 15 years ago I was having a whinge about how hard my life was as a single mother of four, what with working full-time as a teacher, wah wah wah…
Then, being a history nut, it suddenly hit me: I was living the dream.
Imagine the thousands/millions of women in history who would have killed to be in my position? I was able to walk away from a marriage that wasn’t working AND take my boys with me, away from a dysfunctional partner. I had my own home AND I was educated. I had a profession (teaching) which meant that I was able to support my family with dignity and ease, instead of having to resort to the oldest profession to put food on the table.
Honestly, that was the last time I felt bad about my situation. I consider myself lucky and since then I’ve concentrated on appreciating my freedoms, for those women before me who weren’t so fortunate.
Wow, Frogdancer! You’re not only lucky, you’re one incredibly strong woman and a great role model for your children. On top of that, you forced me to look up the word “whinge” — even the fabulous Mr. Groovy never heard of it before.
I’d say you checked all the boxes for this post. I was reading about the sanitary problems in India the other day. Some women hold their bladders over 13 hours to relieve themselves only when it’s dark as they’re afraid of sexual assault and robbery. It’s incredibly sad and makes me incredibly grateful for my wonderful life here in the States. (ps I’m devastated about September ): )
Wow, Gwen, I’ve not heard that before about women holding their bladders for so long. Aside from being incredibly uncomfortable that can lead to infections! Yikes.
We were looking forward to meeting you so much. It’s just poor timing right now with the house build.
An Idiot Abroad is hilarious. I need to watch more of that. Most of us don’t understand how tough poverty is in other countries. It’s pretty funny to see the guy’s reaction to normal life in India. I’m thankful I live in the US.
I wish I knew that Joe, I just gave away our DVD of it…I could have sold it to you on Ebay🤣
We watched it on Netflix (which we just cancelled) so we may be needing that DVD too!
It is hilarious, even more so because it’s his “friends” who thrust Carl into the most uncomfortable situations. Carl trying to use a bathroom (i.e. hole in the ground) in that one episode is one of my favorites. That, and when he was in a tank surrounded by sharks.
Sounds like what you’re talking about here is gratitude. And the more you realize your place in the world, the more incentive there is to use some of your wealth to give back to the people who don’t have it (like the millions of women and girls who skip school/work due to lack of feminine hygiene supplies…)
Also, the Outlander series is a great read for getting what it was like to live in the mid-18th century. Not a pretty time to live.
You’re right about gratitude, Angela. It’s hard to fathom having no feminine hygiene supplies. In many cultures that would be a luxury, indeed.
I never heard of the Outlander series but as we’re sitting in the library this very moment, I’ll check it out. Thanks!
No, Fonzie AND Pinky, you did not jump the shark with this one. 😂 Good reminder about how great we have it with US capitalism and that we should shun materialism to pursue freedom. Seeing a dirty old broken toilet with no seat in a closet as the only bathroom at a small day school in the Dominican Republican is an image still in my mind. The kids there were so joyful! We have so much more (materially speaking) in the US but there seems to be a lot of stress and crankiness going around.
Carol @ Downsize Your 2080 recently posted…Dream Big! Bigger! Biggest! Because You Are Not an Avocado. A Review of My 1996 Dreams List.
I can see how that image of a dirty, broken toilet seat would be burned in your mind.
I continue to remember a trip to Jamaica with my family in the 1970s. We were on a train going through a very dense region that seemed like wilderness. The train paused briefly between stops and suddenly a throng of children ran up to the train windows with carved statues in their hands, fervidly trying to sell us their statues. I was young at the time and thought the kids were a strange nuisance, not realizing their families needed the money from their sales to live on.
As a fellow jackwad, I’ve come to realize this through our travels. We are so blessed and so privledged in this country it’s kind of crazy.
I read a stat somewhere that American spend more on trash bags than most people spend in a year…. trash bags… something we literally buy to throw away!!
Stupid.
You, a jackwad? Say WHAT?
We never looked at that statistic about garbage bags. That’s quite ironic. Interestingly, yesterday on the walking path we saw a large group of preteen school boys out picking up trash with a few chaperones. We’ll try to catch them next Thursday and have Mr. G do a Trash Talk with them.
Q: What kind of blogger submits a post of 81 words and calls it a day?
A: Seth Godin
But yes, you fulfilled your *duty* 👍 I enjoyed reading it. Particularly the theme of gratitude throughout, and the REALLY cool book lists.
Kate Spade reminded us how wealth and accumulation doesn’t = happiness.
Ha, ha, from your lips to God’s ears. Oh, to write like Seth Godin!
Yes, quite a shock about Kate Spade and now Anthony Bordain. Outward appearances are often no indication of how a person feels on the inside, I’m afraid. I feel bad for them and their families, especially their kids. That’s got to be so hard to live with.
Hey man I loved that goat yoga class! Now I wouldn’t go regularly…it is pretty humbling to see what the rest of the world lives on. I watched Living on One Dollar and was so struck how families in poverty were so generous and gave to others what they barely had themselves.
When I first heard of goat yoga I assumed it was a joke. Now, can you imagine what people living on a dollar a day would think of those of us who pay money to have a goat stand on us while we exercise?
It’s quite amazing how happy some folks with what we consider “so little” seem to be happier than those of us with “so much”.
Man yo just made it real. I also often think about how we would.all be living better than the Kings and queens of even 150 years ago. So much advancement in such a short time period. It is mind boggling.
I often tell this to my patients. Think of where medicine was in the 1950s to now. Night and day difference. As for the ranch, stay patient. That is what I am learning about building.
If I remember correctly, John Adams’s daughter developed breast cancer and had a mastectomy in 1811. Can you imagine having a mastectomy in 1811–without anesthesia? Oh, and here’s another one for you, a personal anecdote. My cousin, Tommy, who was the same age as me, developed leukemia when he was in the first or second grade (around 1969). I remember spending hours in the hospital parking lot as my parents and other relatives provided blood for Tommy’s transfusions. Children weren’t allowed in the hospital back then unless they were patients. Anyway, I can’t imagine the hell that Tommy went through. As you said, my friend, the advances in medicine over the past half century have been mind boggling.
Through my supreme authority I announce that your obligations have been fulfilled 🙂
Great post! Strategic participation is a nice way to frame it.
In the past centuries / decades we’ve had tremendous increases in productivity. However, this hasn’t lead to us having more freedom, because we’ve chosen to significantly increase our standard of living (like the new iPhone each year). If we choose to forego some of the latest and greatest trends, we can buy freedom instead.
“If we choose to forego some of the latest and greatest trends, we can buy freedom instead.”
Exactly! Thank you. Nothing wrong with spending every dime you make. Just stop buying stuff you don’t need. Try spending $500 or $1,000 every month on shares of VTSMX instead. Anyone who does this will find themselves in a wonderful place tens years hence. Love the way you mind works, my friend. Thanks for stopping by.
Hey Fonzie, great post! 🙂 I think we have plenty of people out there swinging away trying to hit home runs in the bottom of the ninth even though they are up by ten runs, and therein lies our problem. They are just never fulfilled, content or thankful for what they have or already achieved and always seeking the next greatest/ newest thing. Just looking back to our recent past is a great reminder. Think of the late 80s before the internet and we had to go to the library or store when we need something.
Brian recently posted…Net Worth Update: May 2018
Haha! At first I was confused with the Fonzie reference. But then I remembered I concluded this post with a jump-the-shark reference. Duh! I’m not on my game today. But, yes, even the 80s were primitive by today’s standards. Heck, you had to get off your butt to change the television channel. You couldn’t just buy one song from an artist; you had to buy a whole album of mostly crap songs to get the one you liked. If you wanted to print something out legibly, you needed a typewriter. And whiteout for your typing errors. So if the 80s were the dark ages, what were the 50s? Thanks for helping me point out how good we have it compared to previous generations. You’re very dren, Brian. Cheers.
Thanks for the thought provoking post. I’ve been reading the Little House on the Prairie series to my kids and trying to impress upon them (and myself) their tremendous good fortune. Growing up prior to 1900 was not for the weak.
“Growing up prior to 1900 was not for the weak.”
Couldn’t have said it better, my friend. Thanks for reminding everyone about the Little House series. They’re a great way for anyone–adult or child–to get acquainted with gratitude. I love it.
Congrats, my friend!
Did I fulfill my obligations under the Don’t-Be-A-Jackwad-Blogger Pact and produce a worthy post?
You excelled it (pun intended)!
And what about strategic participation?
Totally agree!
Is that a legit strategy?
Should be the only one legit…
Or has this blog finally jumped the shark?
I see no sharks here 🙂
Hey, in theory, I am the guy in the trailer 🙂
Checked my salary at the site mentioned above and I can report it depends on your location.
My salary is nowhere close to $32400 but it tells me I am in the top 0.33% for my country and top 2.83% with the same amount for the USA.
Interesting statistics and points to think about.
A similarly sobering (and also I think the numbers are not accurate at some points) experiment with numbers is: https://www.gapminder.org/dollar-street/matrix
Definitely worth a look.
Thanks for sharing 😉
[HCF] recently posted…America is No Longer The Land of Opportunity
Wow. Just checked out the gapminder link you provided. Very sobering. Thank you, sir. I may have to add an addendum to this post and include it–if you don’t mind, of course.
How could I? Btw, there is a whole ted talk about this project (https://www.ted.com/talks/anna_rosling_ronnlund_see_how_the_rest_of_the_world_lives_organized_by_income) Checking this gave me exactly the same discovery you presented above, You’re Richer Than You Think. Through these galleries, I realized not just that how many people do live on how less money but that there are several western countries where people earn multiples of my salary, but their life is less “luxurious” than ours.
[HCF] recently posted…America is No Longer The Land of Opportunity
All I can say is Wow. What an amazingly concise, well thought out blog posting. I follow regularly and devour all of this blog but this posting really strikes me as important for everyone to absorb. I will be sharing it across my family and friends most of whom are not yet onboard with the FIRE concept.
I do miss the fact that there has not been a good Mr vs Mrs Groovy spat in a while! However, this posting makes up for that missing entertainment. 🙂
Thanks, Crusher. I really appreciate your kind words. And don’t worry, Mrs. Groovy and I will be hurling verbal barbs at each other very shortly. Building Groovy Ranch should commence in the next two weeks.
Thank you for a post that reminds me to be so appreciative and greatful for my life here. It’s so easy to forget how lucky we all are in this country.