Why You Might Be Stuck In A Rut, And How To Get Out Of It

wheelJust over four years ago I decided to embark on a journey. I cast off for the unknown determined to change my future because I wasn’t particularly enamored with my recent past. I worked far too many hours and had far too little to show for it. I was working a middle-class job for middle-class pay, and for some that’s more than enough. But I felt I was living a nightmare where I was working too much to pay for a bunch of stuff I didn’t really need. It was a cycle where I would go to work for money, spend the money on stuff, just to find myself going back to work for more money again. Luckily, I realized this wasn’t really sustainable for the rest of my life.

This journey would ultimately lead me from being worth less than a baby to ownership of a six-figure portfolio now spitting out thousands of dollars in passive dividend income. So it’s an understatement to say I’m pleased with my progress thus far.

But let’s back it up a bit…

Who Wants To Take Over The World?

I believe many people find themselves in ruts similar to the one I was in for most of my adulthood. You grow up with all these dreams, graduate school, and set out to take over the world. Except it’s a lot harder to do that in reality than it is in your own head. So you end up with a decent job with some decent pay, and you’re generally happy.

Once you get this regular paycheck you start to realize that while you can’t take over the world, you can definitely afford a bitchin’ pad, a nice car, regular visits to all the hot spots in town, fancy vacations during the two weeks your master lets you out of your cubicle, and a big television, among other trinkets.

And before you know it, you’ve got more stuff than you know what to do with, along with the kind of bills that accompany all that stuff. And guess what bills require? Cash.

So how do you get the cash? You go to work. And you keep going to work while simultaneously building up more bills until all of the sudden you’re old and gray.

But it doesn’t have to be this way. 

More Stuff Won’t Make You Happy

First, one needs to master the concept of the law of diminishing marginal utility. This law, based in economics, basically states that the first unit of consumption of a good or service yields more utility than subsequent units of consumption.

Say what? Let’s break that down a bit.

Think of pizza. I don’t know about you, but I consider myself a bit of a pizza aficionado. So I might find myself hungry on a Saturday night and decide to order a barbecue chicken pizza from Matador’s (a shout-out for a great local pizza spot).

So I get this piping hot pizza and I eat the first slice. It tastes great and I can already feel my hunger subsiding. I grab a second slice, and it still tastes great, but being not quite as hungry as I was when I ate the first slice the satisfaction declines just slightly. And this phenomenon repeats itself during the third and fourth slices to greater degrees. Finally, a fifth slice wouldn’t only not be enjoyable, but would probably make me sick.

And this is true with everything in life. 

You can go from a 1,000 square foot house to a 2,000 square foot house, and guess what? You won’t be twice as happy. You’ll actually more likely be 1/2 as happy.

Why?

Because a house that’s twice as big still provides you the basic shelter the 1,000 square foot house does, but you now have twice the space to heat and cool, furnish, clean, maintain, and fix. That means twice the money, twice the work, twice the headaches.

Imagine you have a car. Now double it  – you now have two cars. Will that make you any happier? You’ve now got two cars to pay for, insure, fuel, and worry about. How does that improve your life?

And this translates into the marginal utility of money. You gain quite a bit of happiness going from $0 in annual income to, say, $30,000 per year in income. At $0, you live outside, have no shelter, eat what society discards, and security is non-existent. But at $30 grand per year, you can afford decent shelter, plenty of food, transportation, electricity, running water, etc. That’s a big jump! So going from $30,000/year to $300,000/year would be even more fantastic, right?

Wrong.

Whenever I think of the marginal utility of money, I’m reminded of Warren Buffett’s explanation as to why he still lives in the house he purchased back in 1958 for $31,500. In an interview with BBC in 2011, he stated:

I’m happy there. I’d move if I thought I’d be happier somewhere else. How would I improve my life by having 10 houses around the globe? If I wanted to become a superintendent of housing. I could have as a profession, but I don’t want to manage 10 houses and I don’t want somebody else doing it for me and I don’t know why the hell I’d be happier.

If a guy who can afford to purchase the entire city I live in still lives in a modest house he bought more than 50 years ago, why should I be chasing some big luxurious home?

No Need To Keep Up With The Joneses

Once you realize that more won’t make you any happier you can look at the Joneses and heartily laugh at the comedy of it all. Like rats in a wheel, chasing more and more cheese won’t get you anywhere. You’ll just end up exhausted. And that’s why the rat race is a no-win proposition. In the end, you’re still just a rat like everyone else.

Getting out of the rut is easy. Just say no to excess. 

I’ve found that all I really need in life to be happy is basic shelter, decent food and drink in my belly, loved ones, a little sunshine here and there, good health, and plenty of time to enjoy the many free activities I like to partake in, like: writing, reading, relaxing, and staying active.

It just doesn’t take that much money to live a fulfilling life. I have found time to be far more beneficial to my happiness than money, and since money is limited I decided to start buying time with my money rather than more stuff.

I often think of Maslow’s hierarchy of needs and note that there’s not a new Corvette anywhere in there. Once you have the basics in life covered, like: shelter, running water, electricity, access to food, love, security, warmth, freedom, and the ability to express yourself, your happiness level is already pretty much maxed out. Trying to eke out a bit more with a big house, nice car, and more clothes than you know what to do with will likely only lead to the exact opposite of what you seek. Instead of material goods, I would recommend thinking about independence.

Conclusion

I found myself stuck in a rut more than four years ago. And I decided to take a good look around me and focus on what made me really happy. The rest had to go, and go it did. Since then I’ve funneled all of my excess capital into income-producing investments so that the rat wheel eventually turns without me running my legs off. This leads to the freedom and independence in life that I so aggressively crave. Once your basic expenses are covered for you without any work on your part you’re free to pursue passions with reckless abandon. And you won’t be exhausted any more from running on the wheel all day long. That means more energy to spend on things that you genuinely enjoy. That may be raising your children, traveling, reading, programming, building, or just thinking. It’s about finding value in your life, and making sure your spending is aligned with that. Spending money on things that do not build value for your life is just a waste of money that could otherwise be quite productive.

You might be stuck in a rut too. But you get out of it by realizing that more stuff won’t buy you happiness. Once you have the basics in life covered  your happiness will come from within. And maybe some people are scared to look within themselves for fear of what they might see. But I found someone who has a passion for writing, inspiring, and investing when I looked within myself. I challenge you to do the same. Find yourself and embrace that person. Cut the rest loose. Only then will the rut be behind you.

How about you? Ever find yourself stuck in a rut? Did you find a way out? 

Thanks for reading.

Photo Credit: renjith krishnan/FreeDigitalPhotos.net

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81 Comments

  1. Another good post DM. I found myself in a rut when working a dead end job and being treated like garbage by the employer. All my coworkers at that job were treated like crap also except when they needed someone to work overtime. So what did I do? At that time I was already starting on my investing journey. I went to the 2 major airline sites in Canada and booked a one way plane ticket 3 months out. I never told a soul until I booked the ticket.

    I was off to a better life. Now I am able to invest more and more money to quickly get out of the rat race even quicker.

  2. Great post, Jason. This kind of thing is what makes your site unique.

    Congratulations on being rutless!

  3. There’s a quote, and I think Warren Buffett said it. It goes like this, “Success is getting what you want. Happiness is wanting what you get.” So there are times when I’m feeling down because I’m not getting what I want done. Then I realize I’m in a pretty good place.

  4. Great question Jason. About 4 years I was in a bad rut because I was working for an engineering firm I despised and didn’t think I could leave……because the development industry (my specialty) had crumbled in Florida. I just kept trying to hang on. The job had been great for the years up until the bust, but once the owners stopped making stupid amounts of money….well let’s just say they revealed themselves as true ass holes. I couldn’t find another job, and couldn’t stand to stay. The environment was toxic. Finally, I forced them to fire me. I didn’t have another job, but I had little debt….and the faith that God would help me through it.

    Turned out to be a great time in my life. I started working for a start up company and gained valuable experience. I traveled a fair bit to see family and my girlfriend…..which was doing her last year of grad school out of state. Not only did I survive, but I thrived. Of course I wouldn’t begin to take all the credit…..:)

    -Bryan

  5. Jason,
    Love your posts. If you keep writing, I’ll gladly keep reading.

    I am getting ready to go to bed after having a week off of work. It was great, a glimpse of things to come. I have a good job, but I’ll admit that I would rather not go in tomorrow.
    KeithX

  6. It all comes down to lifestyle inflation. Avoid it and your future self will thank you. One of the best decisions I’ve ever made was to continue living like a student after getting out of school. Doing so has allowed me to maintain a savings rate of about 75%. “Buying time rather than more stuff” is definitely the way to go. I wouldn’t have it any other way.

  7. Thanks for another thought-provoking post. It spotlights the difference between the words “need” and “want.” What do I really need? What kind of life do I want?

    It is a bit ironic that some of the dividends we receive are driven by those on the “hamster wheel” of consumption. I don’t know if this cycle is sustained by complacency or if that’s all a lot of people know.

  8. This is a very nice post, I hope it inspires a lot of people.

    I’ve done a bit of thinking about the luxuries that I enjoy. I don’t care much about fancy cars and fancy stuff. My wife and I are buying something that most people may not realize is a great luxury: the ability to do what we want with our time. No Mercedes, BMW, or Porsche will ever come close to this type of luxury. Our dividend engine is running full steam ahead right now and has given us the power to fire our employers, something very few people in this world can do.

  9. Nice post Jason! Guess that job we do from 9-5 is a rut, unless, someone really love it!

    I’m trying to get out of it and that’s why my blog and other side gigs like you 🙂

    Best wishes.

  10. Hey Jason,
    I really like this post and this is the reason why I got into investing in the first place. I think we have all been stuck in a rut at some point. I can remember 6 years ago not being able to ever go out and enjoy myself because I made just enough money for rent, electric, and few groceries. That really woke me up and I vowed to never live like that again. I`m doing good now but I still work 55+ hours a week. I want to continue investing and earn that 6 figure portfolio someday. Thanks for sharing.

  11. Investing Pursuits,

    Glad to hear you found your way off the wheel. The wheel seems like the only way, until you simply step off of it.

    Best of luck with your continued success!

    Take care.

  12. Living At Home,

    Happiness is wanting what you get. I suppose there’s a sense of gratefulness that’s necessary for happiness. Finding joy in the small things in life is really a hallmark of how I go about life.

    I need to look no further than the millions of people around the world living without basic shelter. It’s all about perspective.

    Best regards!

  13. Bryan,

    Great story there.

    I’ve found that anytime one door closes in my life, soon thereafter a better door appears. Good for you for closing the one to open the other.

    Thanks for stopping by!

    Best wishes.

  14. KeithX,

    Thanks for the support. I really do appreciate it! Without you guys I wouldn’t be writing.

    Glad to hear you thoroughly enjoyed a week off! Very nice. I took a couple of weeks off from my previous job earlier this year, and those two weeks off convinced me I had to make that a permanent change somehow. Your time is coming. 🙂

    Best wishes.

  15. Jake,

    I’m with you. Lifestyle inflation is an absolute killer. If you were perfectly fine with much less at 22, why do you need more at 30? I often hear people talk about college and how happy they were at that time living a carefree lifestyle, but now life is stressful and crazy. But who do we have to blame for this?

    Great job on the savings rate. I wish I could attain 75%! However, I’ll be happy with 50% this year with all of the changes. I’m giving it my best shot. 🙂

    Cheers!

  16. Greg,

    Absolutely. Needs are quite easy to meet. Wants, however, can be insatiable. And they can control you if you’re not careful. People can be a victim of their own desires, and I was certainly on that side of the fence at one point in my life.

    I hear you on the irony. Although, many of the companies I invest in produce products and/or services that even frugalists like me buy: Food, beverages, gas, banking, the internet connection I’m using, etc. It’s just all at a much smaller scale.

    Thanks for stopping by!

    Best regards.

  17. Spoonman,

    Absolutely. What could you possibly want to own more than your time? What’s worth more than your freedom? A fancy car? That’s just crazy to me.

    Looking forward to seeing how you transition after you fire your boss. 🙂

    Donald Trump ain’t got nothing on you!

    Cheers.

  18. PIM,

    Absolutely. Once you’ve empowered yourself by saying “no” to the wheel, you’re halfway home! 🙂

    We’re all becoming freer one day at a time. To our success!

    Take care.

  19. DividendMongrel,

    I know exactly how you feel. It was just a little more than a month ago that I was also still doing the 50+ hour workweeks. And I probably still work that much right now, although now it’s “working” on something I truly enjoy.

    You’ll get there soon enough, my friend. Just stay persistent and consistent. 🙂

    Cheers!

  20. The title of this blog post reminds me of a song with the lyrics, “if you wanna get out of that rut you better get off of your butt.” Truer words I cannot find. It is up to ourselves to make any changes we seek in life. Not looking to blame society, economy or any other ill of the world… it’s basically up to us to make a change. Thanks for the reminder that it’s never about “stuff” rather experiences.

  21. I’ve definitely been in and out of a few ruts in my time. I’ve had the same job for nearly 10 years, and for the most part really enjoyed it, but has definitely been a roller coaster ride of highs and lows. I find I can usually get out of these ruts by either (1) getting inspired to stick at it and work hard towards financial independence (which posts like this help with 🙂 ) or (2) being grateful for what I have, and finding ways to have a bigger impact, add greater value, or be more helpful to others with the job I have.

    I must admit though, I’ve been toying with the idea of just working less and earning less for a little while – having a whole heap of other projects I’d love to work on, as well as a 2 year old daughter who I want to spend more time with, are making this option more and more compelling.

    And as you say, the best way to make any of these things happen is to reduce what you consume. Thanks for another great post DM!

  22. “You know Alice, Let Norton have his TV and his telephone. I have one thing he hasn’t got… Financial security.”
    (Jackie Gleason as Ralph Kramden)

    Hopefully some of you guys know what I am referring to. Haha.

  23. Great post, Jason. It’s definitely inspiring to see the way you’ve taken control of your life. It’s amazing that you’ve found a way to live close to family, get paid for doing what you love, and still work towards financial freedom. Keep up the great work!

  24. Jason been following for about 4 months now! Not that you would remember but i have sent you an email before, which i felt pretty star stricken that you replied too!
    keep up the great work, thanks to you i’m staying motivated to keep on saving. Some days investing long term can be hard especially being 23. I see all my peers with awesome toys and I’m tempted to cash out and join the masses but then i come to your site and i get a taste of reality, thanks for the constant reminders to keep on keeping on!

  25. Excellent encapsulation of where you are at in life. There are days where I feel like getting rid of most things I own and downsizing our house. Then my wife reminds me I’m not single and we have 3 kids. Jolted back to reality. The little things do count and we are shedding stuff, buying less, watching less TV and just living more. Happiness is inversely related to stuff.

  26. Jason,

    Thank you. Very timely for decisions I have to make in my life. Continued success to you. I look forward to your first book! Margaret

  27. DivHut,

    I couldn’t agree more. I didn’t get out of my rut by complaining about my situation, or doing the same old thing I had been doing my entire life. I put a plan together and started executing it right away. Nobody else is going to change your life; it’s up to you.

    However, I think where most people fail right away is in believing they have no control over their situation, or can’t really make many changes. It really takes a vision to see the future. But that’s why I’m here writing. I’m here to tell people that they do have control.

    Thanks for stopping by!

    Take care.

  28. Jason,

    Thanks for adding that.

    I agree that both choices are great. And I incorporate both into my strategy. I’m both extremely grateful for what I already have, but I also work very hard toward freedom.

    And I know firsthand what kind of thoughts are rolling through your head in regards to possibly working less for less money. I’m now working less (though, not much) for less money, and the other side feels great. But if you already have a job that you really enjoy, that makes it a more difficult choice.

    But accepting what will and what won’t make you happy is first and foremost.

    Best wishes!

  29. I couldnt agree more with everything you said. Stuff doesn’t buy u happiness. At my highest point in life 6-7 years ago I had everything I ever wanted. 4 cars, motorcycle, jetski,atv, 2 segways lol. But I was miserable. Novelty of just owning stuff quickly fades away especially when u gotta maintain everything and keep up with the bills insuring and operating all these toys. I was in a rut for a long time and I still consider myself somewhat in a rut. But the more I strip unessentials away the clearer focus I have on what is important. Not all luxury good are a bad thing. Take for instance a smart phone, tablet, laptop where often they actually enhance your life for some people. But a 500 set blueray collection, 100 old transformers toys or a closet full of 75 shoes will definatley not make u happy.

    Some hobbies are essential to peoples happiness while most are just an unneeded indulgence. Finding that balance is everyones struggle.

    Cant help but to relate to jasons journey as he has picked up and moved with just a car full of life belongings traveling across the country. Jason is not married to his stuff and is control of his life. Reminds me of a nomadic tribes person picking up camp and moving every season to look for better opportunity to take care of themselves. A simpler more mobile life keeps the brain active. Gone are the anchors of employment, housing commitments, consumer debt and most importantly stuff you dont need!

    I cant help but analyze people.Since we are on Jasons blog I cant help but predict his next move. I dont think he will be idle long. To fullfill his life he will be moving constantly exploring new possibilities. He doesnt have any commitments and he can write anywhere. He is a Nomad, his journey has just begun like Frodo leaving the shire! Sorry! I like to just riff my long winded responses.

  30. Addison,

    Thanks so much. Glad you enjoyed it. 🙂

    I’m in a great place in life right now. I’ve worked very hard, but luck has also found its way into my life.

    Keep up the great work on your end too.

    Take care!

  31. gen Y investor,

    Thanks for the continued support. I really appreciate it.

    I know it can be tough to delay gratification for years on end while you watch your peers “live the life” right now. But, trust me, they’re not really living the life at all. All of those toys come with a price tag, and the sticker price doesn’t tell the whole story. Every dollar they’re spending on their stuff today is multiple dollars you’ll have toward freedom tomorrow. They’ll still be on their rat wheel long after you’ve claimed independence. We’ll see who’s jealous then.

    Cheers!

  32. Dividend Growth Journey,

    Absolutely. They say the best things in life are free, and I completely agree. Family, friendship, love, writing, reading, beautiful days, and going for a nice walk are just a few things that I derive a lot of happiness from that don’t cost a thing.

    Best regards.

  33. Wade,

    I can understand and appreciate your situation. Tough to downsize considerably with three children.

    But enjoying today by focusing on what really makes you happy is what matters. Ultimately, financial freedom is about maximizing happiness. No sense in attaining FI at the cost of your happiness. And I see you decided to take a similar road as you work from home for less money. Every day is a gift! 🙂

    Best wishes.

  34. Asset-Grinder,

    Thanks for the great comment.

    And I think the word you used – “novelty” – says it best. Material possessions have a certain novelty to them, but that shine wears off over time. Meanwhile, lasting happiness is derived from the simpler things in life. Funny how that works. The marginal utility of money at work. 🙂

    And you may have a point there in regards to what’s next. I’m a bit more nomadic than most people, although my family keeps me somewhat grounded to this area of Michigan. We’ll see what happens. Part of me wants to go on a worldwide adventure, and write about the ability to live off of dividends in exotic places like SE Asia. But another part of me wants to find the best possible area of Michigan to settle into and be close to family. It’s tough to have these opposing dynamics inside of me dueling it out all the time, but that’s just my personality.

    No matter what happens I’ll be sure to make the most of it. 🙂

    Thanks for stopping by and offering the perspective of someone who’s had everything. Really appreciated.

    Best wishes.

  35. Love your article and the complete honesty in it!!!! It’s inspiring to follow your commitment to your goals and dividend income.

    I can completely relate to your feelings about ‘traveling’ and ‘being near family’. It’s a battle I’ve had to work my way through over 2 decades. My final conclusion is to simply build for BOTH.

    No need to have the “opposing dynamics inside of (you) dueling it out all the time” – work toward doing BOTH. Find your perfect place, make it easy to maintain, make it VERY affordable or easy to rent out (pay for itself – roommate, short-term tenant, etc.) when you are away traveling…and then take off for SE Asia (or another part of the world that calls to you) every year. When you are ready to come home, your perfect place will be waiting for you.

    I’ve had the good fortune to live in Japan and Australia (a year each time) and have always had a place to come home to = keeps me grounded. (Totally fell in love with Australia and New Zealand.) So, our retirement plan is now being structured so that (in the not so distant future) we can live there frugally 3 to 6 months every year. And, at the end of it, we can come back to our simple, perfect home.

    We are NOT there yet (some years to go still)….but it is in the plans and we are making steps toward it….because, honestly, I would go into depression if I couldn’t have BOTH some day.

  36. Thanks for the reply!

    I think its great to have a base in Michigan but exploring for the half the year in other places would be a great idea. Love your SE Asia idea. Really reminds me of this blog http://tielandtothailand.com/ . Its about a couple quitting work and living modestly in Thailand. They are now living a richer and fuller life with purpose. Absolutely love the idea. Very inspiring!. Everyone should give it a look!

    Still very hard not to be a consumer. I still struggle with it. I am being enabled most by my family where they still leave unhappy materialistic lives. Very hard to change people in those regards especially when they dont want help to become happy. I myself still buy items I can do without at times but I really try and limit myself. I Just bought myself a nice leather 200$ messenger bag I really didnt need but wanted for 5 years lol. At least it was on sale from 380$ but the savings still doesnt factor in I could get by with my old 40$ bag and my new bag will not bring me any type more happiness. I still have the tags on it and still debating returning it.

    At least once a day I still gripe about having too much stuff. Too many kids toys! Too big a house, Too many bills, Too much furniture , too much kitchen items, just too many possessions. I have a fraction of what I use to have but still to me its too much. My wife is not fully on board tho which is causing some friction and plus I have two young kids at home which is hard not to provide them their wants instead of needs. I have a constant stream of clothes and toys being poured into the house from family members. I tell them all please just donate to their education fund instead but it falls upon deaf ears. I want my kids to a have a full life of experiences rather than stuff. Experiences build character and material items hurt your character

  37. Asset-Grinder,

    LOL! I know your pain! My husband and I have been married 12 years and I am still working on him. I’ve learned to frame savings goals in terms of things he wants. He LOVES college football (he gets great joy from this). So, when he tells me he wants to fly or drive out to go meet friends to watch his favorite team (and spend $$$ on a seat ticket), I always try to say YES…as long as he helps me to achieve our other spending goals and employs cost-saving measures on the trip. I also entice him with freedom from his J-O-B…I have been at home with kids for nearly 10 years now (which, by the way, has been a GREAT financial decision for us).

    Like you, we have two young children and we made a similar mistake 7 years ago about buying a big house, 3-car garage, on a cul de sac. Kids LOVE it…but, as you obviously already know, it’s a lot of work. We are slaves to our home. I’ve made Excel spreadsheets of all the costs (insurance, taxes, maintenance costs, heating/cooling, etc) and show them to my husband to illustrate how these kinds of monthly costs will not be sustainable in retirement. He’s coming around slowly on this – and I move slowly on the ideas…gives him time to catch up. We do intend to have a ‘company-paid-for relocation’ in the next year or two…so, we will eventually be able to leave the big house burdens, downsize and go for simpler lifestyle. A plan is in place for this goal, too.

    I keep reminding myself that our family right now is like a big container ship. We’ve got lots of shit on board (ideas, dreams, possessions, habits, etc.) and it takes a while to steer us in a new direction. But, I am relentless in my pursuit of financial freedom…as my husband will attest. (Good for you for your continued efforts to simplify!!!)

    As for your $200 messenger bag…ask yourself what advancement on any of your meaningful goals could that $200 buy? You could also ask yourself if you will get $200 of JOY from it (as Jason’s article alludes to). That should help you decide instantly.

  38. I guess the reason I work so hard is to accumulate money. The reason I invest is to accumulate money. The reason I want to accumulate money is to fund my lifestyle.

    I am not a frugalist, and I guess where I diverge from you, DM and most of your readers, is that I am not willing slash things from my lifestyle simply so I can work less. I don’t see the point in having all the extra free time that NOT going to work would allow for, if I have no money to do the things I enjoy doing while not at work.

    Again, to each his own, but many of things I enjoy are rather expensive, so I am likely to look for ways to increase my income as much as I can. That was the whole reason for my shift to dividend investing. More income.

    Just offering a different perspective.

    Keep up the good work!

  39. CFO Mom,

    Thanks for stopping by. I really appreciate your perspective there!

    And I bet that was really amazing to live in Japan and Australia for a year each. I especially love the idea of Australia’s big cities. They just seem so much cleaner than American big cities, along with less overall crime. Really fantastic.

    I hear you on having both. The issue for me right now isn’t just my family, but also the fact that I have nobody to go traveling with. I’m an introvert by nature, and I don’t know if I’d do very well traveling abroad all by myself. I’m sure I’d probably run into really cool people along the way, but being an introvert it’s difficult to go out and just meet up. I’d love to eventually meet someone who has a similar interest in traveling, and could perhaps have the flexibility to go with me. So we’ll see. I’m content being back home in Michigan right now, but I’m sure sooner or later I’ll be up for another big adventure.

    I like your idea on creating a perfect home. I’m not sure how I’d go about it. I don’t know if I’d like the idea of someone else living in my house while I was away, and then coming back home and seeing what may or may not have happened. And finding the right short-term tenant for something like that might be pretty difficult. But perhaps this would be possible with just renting while you’re both abroad and back home. As someone who owns very little, I wouldn’t have a hard time renting a storage unit while I’m away, or storing what little I have in my parent’s garage.

    Thanks again for stopping by!

    Cheers.

  40. Asset-Grinder,

    Oh, I’m a big fan of that blog! They’re actually already on my blogroll and I’ve linked to their articles a few times on my Weekend Reading posts. I really enjoy their story, and I like that they give a lot of “nuts and bolts” details.

    It’s tough to minimize when you’ve been maximizing your whole life. You’ll find the best balance over time. Life is a work in progress. 🙂

    Best wishes.

  41. BCS,

    I appreciate the perspective there.

    Nothing wrong with what you’re doing, because there is nothing inherently right with what I’m doing. Just different ways of going about living life.

    I’ve never derived a lot of joy from anything that costs a lot of money, so frugality is easy for me. And buying time now allows me to participate in the things that do make me happy, as I’ve pointed out. But to each their own. If what makes you happy costs money and you’re willing to work hard for that then more power to you. Nothing wrong with that. It’s really all about creating value in your life, and if those expensive things bring your life value then you’re already on the correct path.

    Cheers!

  42. Although conversely, if everyone stopped buying all excess items that they don’t need, the stock market might not be as fun as it is now.

  43. Spoonman, I look forward to the day that I can fire my employer! Great accomplishment.

  44. LiveNotWorkForever,

    That’s an interesting thought. I’ve read various ideas based around this concept, but it’s difficult to quantify what exactly would happen. Of course, it was predicted years ago by Keynes that we’d only be working 15 hours per week by now. Of course, that didn’t happen.

    I think supply and demand would take over if consumption was cut dramatically. Prices would fall on much of what we buy, and work wouldn’t be as long or as necessary. Early retirement might be impossible as we currently know it, but if it’s a world where stress is significantly reduced and workweeks aren’t as long I don’t know if I’d really mind.

    Keep in mind as well that many of the products that we buy and use every single day no matter what, like food, beverages, cleaning supplies, and grooming materials would still be in high demand. So companies like PG, KO, PEP, CL, and CLX wouldn’t go away overnight. Utilities would still be in demand. So would healthcare companies. I think your companies that would really be affected would be home builders, car manufacturers, luxury retailers, and such.

    It’s all theory, but it would be interesting to see an alternate world like this.

    Cheers!

  45. i wish i had figured all this out a long time ago. It’s personally quite gratifying to see people like yourself, Jason and many other freedom 35 and 40 er’s who get it. Now I need to figure out how to get my kids into this mindset. I’ve got one planning to have her house paid off 15 years from now (they just bought it) so that’s a start. The others are just renting but putting money into retirement but not at a 30% or 50% rate I’m pretty sure. Probably more like 15 – 20%. Oh well, a mama’s gotta do what she’s gotta do.

  46. Great post! I totally agree on overconsuming. I remember when we just moved here from Russia, we were surprised by prices here. so we would keep buying and buying stuff because it was so many to choose from and so affordable. But slowly we learned… Even my mom stopped spending money. 🙂 Now my goal is to teach my kids how to not buy stuff… Very tricky…. any ideas? how to convince a teen? I guess we only learn from our own mistakes and experience…

  47. Debs,

    Good for your daughter and setting up the 15-year mortgage. Having a house paid off at a decent age is very smart, assuming the payments are well within her means.

    Sounds like you’re doing a pretty good job there, mama! 🙂

    Take care.

  48. Happy,

    Unfortunately, learning from our own mistakes is the strongest lesson of all. And I’m proof of that. I’ve lived and learned, and I paid good money for my experience. My mistakes have been very expensive, but they’ve made me who I am today.

    People have to want change in their life. It’s the only way.

    But they’ll get there if it’s meant to be. 🙂

    Best wishes!

  49. Awesome post Jason! Definitely food for though. But, personally, I somewhat disagree with the notion that there is a marginal value associated with wealth. Your conclusion is based on assumption that the only value gained is though the acquisition of material goods. But, even though you did mention it, I think you vastly understated the magnitude of the impact wealth can have psychologically and behaviorally. As a frugalist, you don’t gain much if the metric we use to evaluate utility is pure purchasing power. However, if we also evaluate based on confidence, security and lack of stress, the utility value increases substantially. Especially when going from $30k to $300k. Just my two cents! Thanks again for writing. You never fail to give me something great to read at lunch 🙂

  50. I have been reading your blog for a few months now. You are spot on with the idea of looking at the marginal gains in happiness or life style after a certain point. I came to the same conclusion, gains in lifestyle or happiness is minimal at best at a certain point. Years ago I did an experiment with our budget. As a family of four we lived on $100 a day (excluding mortgage). So one month we ran a budget of $120 a day. My wife and I realized that our lives were not 20% better. With this we decided to live on half of our income. Once the mortgage was paid off, the dividend train has taken off.

    The upside with living on 50% of your income is that one can easily become financially independent in 12-15 years after debt is paid off through dividend investing. We will be in semi-retirement by age 54 and my two kids will not have college debt. Easily accomplished on two teacher salaries.

    I enjoy your blog and wish you the best in your transition.

    Brad

  51. Nice post. I found the law of diminishing returns went so far as for the returns to be negative!

    As soon as you change your mentality to one of questioning frivolous spending this whole financial independence thing becomes a lot easier!

  52. Sam,

    Thanks for stopping by!

    I wonder how your opinion would change if/when you have enough money to compare both sides of the coin. That would be interesting to see.

    I disagree that my viewpoint is shaped by my frugality, as I’ve read various stories of millionaires who find no more comfort or security in their situation because they’re worried about rising education and healthcare costs, worried about being sued, etc. I also disagree that someone who goes from $0/year (sleeping outside, eating garbage) to $30k/year (living a middle-class life) will experience the same amount of life transformation and increase in well-being as someone going from $30k/year to $300k/year. $300k/year just buys you a bigger house, a nicer car, slightly better food, etc. And it’s really not just my opinion as this is all based on years of studies in economics.

    But I do hope you get to the other side to experience the change for yourself and see how you feel. 🙂

    Best wishes!

  53. Brad,

    Thanks for adding that perspective. It’s funny how after years of studies on this proving that marginal utility exists people still chase the almighty dollar. I think that’s why I really admire Buffett. The guy just plain gets it. He could have made $200k/year and he’d be living a similar life to the one he’s living now, except for the private jets. He’d have to fly commercial. 🙂

    Good for you guys for going through that experiment. That’s marginal utility at its finest. I think frugality is an experiment in itself. I lived a life where I was spending all of my money and one where I was saving more than half of it. And it was only after saving the money that I realized I was actually more happy because my focus wasn’t on trying to increase my base happiness to unrealistic levels. You get on this wheel where you’re trying to run faster and faster…only to realize that you’re really in the same place.

    Thanks for stopping by!

    Best regards.

  54. Under The Money Tree,

    I completely agree. It’s simply a matter of one’s mindset. I never had the mindset until I stepped to the other side, but once you realize that happiness isn’t derived from the amount of money you spend your whole life changes.

    Cheers!

  55. Consumerism is a relatively new curse on mankind and the earth considering that the industrial revolution developed only recently. Unfortunately, it’s all we know. Most don’t question the damages to themselves and the earth. It takes honesty to admit it and courage to buck the so called “normal” materialistic lifestyles. Sadly, the few that profit and wield great power,are greed based individuals or companies. It is what it is……..for now. It’s refreshing to see this blog and the good attitudes toward making personal changes. You all spur me on to keep simplifying my own life. BTW: I sold my 4bed/3ba house last month………what a relief!………. Ahhhhhhhhhhhhhhhhhhh……………..:)

  56. DM,

    I sure do understand your feelings about having someone else in your place. The older I get, the more resistant I become. But, for me, that may be a function of having such a big, nice house with nice things in it right now. When we went to Australia, we did interview TWO different people who wanted to just move in and live with our things during that time (lots of people are keen on this, you’d be surprised). But, I worked out on my beloved spreadsheet that it was more beneficial, financially, to have our entire house packed up and to rent it out empty. Matter of preference and situation.

    Did you see yesterday’s article on Mr. Money Mustache’s site – it was a guest post by J.D. Roth. Toward the bottom of the article, he and MMM discuss all the great features of JD’s condo that support a frugal lifestyle, and he includes a picture of the view from his condo. When I wrote the above, I was totally seeing you in a place like this – that would appeal to others (and maybe you, too). When you go traveling, you could keep the place furnished with the big stuff and then store away all your personal items (sheets, towels, food, dishware). Or, you could keep sets of cheaper dishware on hand for when others stay in your place. Or, empty out the whole place. If all that fails, you’ve got amazing frugal muscle and will most certainly be able to find the kind of perfect home that is inexpensive enough to pay for while traveling frugally!!!

    And, on the destination side, I know for certain that in Australia, there are folks who need someone to “watch” or “rent at a modest price” their furnished home while they are away on 3-month holiday or on an expat assignment (especially in Australia’s capital -Canberra). You can find opps like this on their in-country forums. (For Asia, it might take finding an expat forum to locate places.)

    As for your other challenge, the ‘introversion’, I could not agree more with what you said. 23 years ago, I tried to overlook that aspect of myself on a trip to Europe. I was miserable and lonely riding the trains around the continent, touring Amsterdam, staying in hostels. If it had not been for a good friend who was living in France at that time (with a cute house and spare bedroom), the trip would have been a total bust. Another introverted friend had a similar experience touring India. So, I totally applaud you for your self-awareness. — That said, if you do ultimately decide you really WANT this, the internet is your friend (a social group for Everything these days…as you well know!). A good traveling buddy is probably out there looking for you, too.

    Dreaming big for ya, DM!! I sooo look forward to your future travel blog!

  57. late bloomer,

    Congrats on the sale of your home. Sounds like you’re really happy! Are you downsizing to a smaller home?

    The industrial revolution was supposed to eventually culminate in automation across the board and humans working less hours on average. That kind of happened, as unemployment rates will likely be permanently higher due to the lack of demand in low-skill jobs. But it simply spread what hours are left between fewer people, and these people work a lot.

    As long as humans run the planet we’ll never see some kind of utopian society. So I plan on creating my own utopia by becoming financially independent and working as/when I please. 🙂

    Cheers!

  58. Great post Jason. I love the line about once your physical needs are met (food, water, shelter, etc.) additional happiness comes from within. This really became evident to me in the last few years when my wife and I started making more money than we knew what to do with (not killer salaries, but in the $100K combined range). And just like you said, our spending was at about the $30K level and any beyond that didn’t bring much more happiness. There was nothing left to do at that point but to start buying time… Complete FI is anticipated in the 8-12 years.

  59. CFO Mom,

    Thanks for dreaming big for me. That’s sweet of you. I really appreciate it! 🙂

    I did read that MMM article. I actually linked out to it on my recent “Weekend Reading” article. I thought it was just a fantastic piece. Really one of the best articles I’ve ever read. And I think Roth’s pad is very, very nice. Honestly, if money were no object I’d like to live in a small loft with exposed beams, brick walls, concrete flooring, and plenty of open space. And it would be located in an urban hub where I had everything within walking distance. A guy can dream, right?

    We’ll see what happens with travel. I think, as you experienced, a trip alone would be a bit of a bummer. I know there’s lots of ways to build social circles, but experiences are much more vibrant for me when they’re shared with someone I care about. I think the odds of finding someone who can travel for a year or so at a time might be small, but you never know. Or maybe I will go alone some day and meet someone abroad. The possibilities are exciting, either way.

    Thanks again for the support!

    Best regards.

  60. Josh,

    Congratulations! FI in 8-12 years sounds fantastic, and I’m on track for a similar time frame.

    And I’m glad you guys realized the real power of money. They say money can’t buy happiness. Well, it can, but not via material possessions. However, by buying the freedom that owning your own time can give you, you will, in effect, be buying happiness.

    Thanks for stopping by!

    Best wishes.

  61. Not buying new residence at this time…….just paying room and board in my son’s home……..living near the beach, enjoying life……….a simple life……enjoying my grandgirls….continuing to save about 30% of my income until i decide otherwise…:P

  62. late bloomer,

    Sounds very nice! I’m also in a very similar situation as I rent a room from my sister. Just enjoying family and being able to save right now until the next move becomes more clear.

    Enjoy your time there. 🙂

    Cheers.

  63. Very interesting post, I always thought I was alone thinking that way, my life experiences have taken me to Sheiks palaces when I lived in the Middle East (Booze runner) to being in the entourage of a wealthy property developer in SE Asia (Voice of calm and reason) I’ve seen mega wealthy people up close and been part of their lives and their friends/associates lives, none were happy with their vast amounts of stuff. All without exception had to push into the dark corners of societies envelope to find happiness that did it for them, I of course was extremely envious when I first came in to contact with extreme wealth, especially the stables of 30+ cars but its exactly how you describe in your post, the headache of the maintenance/bills and un-reliability of these cars has to be seen to be believed.

    If I was to change anything about my frugal life today, it would be to upgrade to car less then 20 years old, I miss my 3000 mile transcontinental drives 🙂

    Cheers,

    Dave…

  64. travels,

    That’s so cool to have that kind of experience under your belt. I think that’s really priceless. To be around people on the other side and see that they’re really no more happy inside is a real eye-opener.

    Resources are finite. So I choose to spend my money on the accumulation of time rather than the accumulation of stuff.

    Thanks for adding your experience and perspective there. That’s really awesome that you’ve seen both sides of the coin.

    Best regards!

  65. I don’t think life has to be as expensive as we make it out to be. It really doesn’t, I think we make life more expensive and complicated than it has to be. I think most of us have won the lottery if we’re healthy and live in developed countries. It seems many of us are fighting for the icing on the cake when we want all these fancy careers and fancy things. I think most of us have already won.

    Even people with $10 million feel like they’re behind the super-rich. You’d think that if someone is worth a few million that they feel like they’re part of the 1% percent but apparently not all of them feel that way.

    http://blogs.wsj.com/wealth/2008/06/26/middle-class-with-10-million/

    It seems that when it comes to lifestyle inflation, the sky is the limit. Some people (regardless of socioeconomic status i.e. rich, poor, middle-class) sadly do not get off the Hedonic treadmill. What really helped me is reading books like “Your Money the Missing Manual” and “Your Money or Your Life” in it they discussed a fulfillment curve and that really put things in perspective for me.

    I also read a book “How to Retire the Cheapskate Way: The Ultimate Cheapskate’s Guide to a Better, Earlier, Happier Retirement” by Jeff Yeager and he recommends to make a list of *everything* you enjoy doing in life. Don’t think about it, just write it down. Then after you’re done with your list, put a dollar sign next to every item on the list that costs money.

    You can write “dollar store cheap” and “Saks Fifth Avenue Expensive” or make up your own system. He says that will tell you how much money you really need to retire. That is honestly the best retirement advice I’ve ever read in my entire life and I’ve read plenty of retirement and FI books. The author got this exercise from a man who retired early at age 39.

    This advice is so simple that I don’t know why I didn’t think of it myself.

  66. Lila,

    I’ve read so many stories like that, where these wealthy people suffer from even more concerns and problems than those of us in the middle class do. More money, more problems.

    That book by Jeff Yeager sounds pretty interesting. I’ll definitely have to check that out! I love simple advice that just “clicks”. I really felt that moment where it hits you like a ton of bricks after reading YMOYL. And the title says it all. Do you want a bunch of money or do you want your life? The funny thing is that my approach is where life and money intersects, so you get the best of both worlds. You get plenty of passive income off of a large income base while you get to live your life how you want. You’re on easy street after that. 🙂

    Thanks for the suggestion. I’ll have to look into that book!

    Best regards.

  67. Love the Master comment. I wish I could invest in the company I work for but they are private. If I could then I would be the boss of my boss (in a way).

    I am in that rut and it is very hard to get out of when you have a large family to support. I want my kids to have what I did not growing up but now I realize the best thing I could have given them was my time. I am attempting to turn that around and save more. Time is the most valuable asset anyone owns. I want to own my time to spend with my family and friends.

  68. DFG,

    To be the boss of your boss. How nice would that be?

    I can imagine it’s a bit more difficult to get out of the rut when you’ve got others on your back, relying on you. But as you said, I’m confident your children would rather have your time than your gifts.

    Best regards.

  69. The last I heard if you make about $75,000 a year that’s the optimal point to be balanced between having enough money to bills, food, housing, and a few hobbies and the other side of getting sucked into materialism, working more to keep up the lifestyle, not valuing experiences over things, etc.

  70. walletengineers,

    That’s probably a pretty accurate number. Although, it also depends on where you live. In NYC that might not be enough, whereas here in Mid-Michigan that might actually be too much. I would also suspect that depends on how efficient you are. But I’d say that’s probably a good number to shoot for. I don’t personally need anywhere near that to find an optimal life, but I also live in a pretty cheap area of the country. And my hobbies don’t cost a lot of money.

    Cheers!

  71. Unlike a lot of people, not making money isn’t my problem. Although I only gross around 55k a year, I’m pretty frugal. I also don’t have a wife or any kids. My issue is more fundamental: I haven’t found my purpose yet. Frankly, since I graduated from college in 2006, I really haven’t adjusted well to the “real world.” While in high school and college, I had a nice circle of friends and I was really outgoing, I’ve become much more insular and introverted over the years. I live far away from the majority of my friends, and even at 30 I don’t know what I want to do with my life. On weekends, I sometimes spend over 14 hours in the gym just to kill time. I’ve considered killing myself, but I don’t want to give my sister the satisfaction of potentially inherititing my share of the inheritance from our dad. I know that’s a pathetic reason to stay alive, but it’s something.

  72. WMX,

    Man, that’s some really sad stuff there, my friend.

    Life is just way too short to consider ending it prematurely. You’re still young, and you have many years to figure out your purpose. As you can read in my past articles, I had NO IDEA what I was doing until I was almost 30 myself. I was bad with money, I dropped out of college, I was working in the automotive field which didn’t suit me, etc. And I’m also an introvert. My high school years were really rough. I didn’t really have many friends and there were many period of depression. Throw in a druggie for a mom and there you go.

    Sounds like you need to change it up. If what you’re doing is only giving you money and no other satisfaction, then you’re doing it all wrong. If there’s anything you should glean from what I write about, it’s that money doesn’t buy happiness. If you spend so much time in the gym why not study to be a personal trainer? The barrier to entry is low, and so is the risk. But the rewards can be pretty great. You don’t need much money, and I’m guessing you’ve saved up a lot if you make $55k/year and you live frugally. Go on an adventure. Find yourself.

    Best of luck!

    Cheers.

  73. It’s not really the 35 hours that I work that is the most difficult for me to deal with. It’s the 50 or so hours that I’m awake and not at work that prove more daunting to me. I definitely need to find myself and dig myself out of the rut. A social life would be nice, but I’ve almost completely forgotten how to meet new people and to not fear the unknown.

    I know that you’re not a therapist, but your openness in your writing helped spur me to write about my plight.

    Best of luck with your portfolio.

  74. WMX,

    It may not be the work time that’s difficult, but it doesn’t sound like it’s helping either. Like I said, it might be time to switch it up. Do something different and that may improve the rest of your life as well. I find that when I work around people it forces me to come out of my shell a little bit.

    Give the personal trainer idea some thought. Or something similar. There’s gotta be something you do when you have spare time. Whatever that is, find a way to do it more and make money from it. That’s exactly what I did. And I couldn’t be happier for it.

    Best of luck to you.

    Take care!

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