As any regular readers know, this blog is mainly focused on dividend growth investing but is not solely about such. I also like to delve into frugality, retiring early, the philosophy on consumption, budgeting and so on. Today, I’d like to talk a little about the chains of consumption.
I read Plato’s Allegory of the Cave when I was in my teens, and although I didn’t know it at the time this allegory forever changed my view on life. I highly recommend anyone who hasn’t already read it to seek it out and let me know what they think.
The basic premise behind the allegory is that there are prisoners in a cave, who have been chained to the walls of the cave for all their lives. They are unable to turn their heads. They entertain themselves by looking at shadows on the walls in front of them, shadows that are cast by puppeteers around a fire behind them. They take these shadows as reality and the chains as part of life. They try to guess which shadow is going to come next and take great pleasure in these shadows. One day, one of the prisoners is freed. He is temporarily blinded by the fire and doesn’t understand how the figures are casting shadows on the wall. Later, he leaves the cave and is blinded by the sun. It takes him a while to understand the true way of the world and later pities the prisoners still chained to the walls of the cave.
I was once chained to these walls, burdened by a work-earn-spend-consume-work cycle. I knew of no other way. I thought that this was the only way life could be lived, because that’s what everyone else was doing. The shadows being cast on the walls (commercials of new cars, visions of expensive vacations) showed me what life is, and I had no reason to doubt this as truth. Everyone around me was also chained to these walls, looking at the shadows, working to earn and earning to spend, so I was simply in the same predicament as everyone else. How bad can that be? Worse than I thought. These chains made up of debt and needless consumption are extremely hard to break.
I was freed from those chains in mid-2010. I started to seek out an alternative way of living and stumbled upon one of the only real books I’ve ever sought out on my own. I read Your Money Or Your Life, a book that discussed your life in terms of time and energy and not in terms of money. When you are working for a paycheck, you are basically exchanging units of your life energy for money. Life energy is limited, as you only live so long and one day you will no longer be alive. How much of that limited time that you’re given is worth exchanging for a big house (and mortgage), a newer car, a new wardrobe? How many chains do you want attached to your wrists? I decided that I wanted no chains at all, and I walked out of the cave. It was blinding at first, but my eyes have adjusted now.
I have learned that my time here on Earth is limited and that every minute that passes by is one less unit of life energy that I have left. I don’t want to spend 50% or more of this available time at an office trying to climb a corporate ladder to nowhere. I have learned that if you pay attention to the shadows (commercials for consumption), instead of the puppeteers (marketing companies for products) you’ll never escape those chains. I’m not saying to never spend money, but simply to be thoughtful about your consumption. Having a 5-bedroom house when you have no children, three cars when there are only two people using them, or keeping your thermostat at 80 in the winter are all ways of living that could, and should, be changed. Getting away from the endless pursuit of stuff will only benefit you. It’s benefited me.
My basic plan, now that I’m no longer bound, is to be mindful of all expenses. I budget every single dollar I earn and spend, I moved to a state with no state income taxes and free outdoor activities, I cut out expenses like my mobile phone, cable, I sold my car and take the bus, and I rent a cheap apartment that is located on the bus line that takes me to work. I take my excess savings and I invest in companies that produce products that people use everyday. Think beverages, food, gas, medicine, toothpaste and the like. Even frugal people still need to brush their teeth! These companies reward investors with regular distributions, in the form of dividends, and with those distributions I hope to one day be able to pay 100% of my limited expenses and have money left over.
What about you? Are you bound by your own chains? Have you stepped out of the cave?
Thanks for reading.
Photo Credit: jscreationzs