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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.
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