Tuesday, November 20, 2012

Simplify: How Much Is Enough?

I think that most of us have lost sight of the difference between wants and needs. Everyone just has to have the newest iPad and iPhone and whatever other toy has come out this month, even if they already own the prior version that is only a few months old.

In the middle of what is supposed to be a bad recession, even the children walk around with phones that cost hundreds of dollars and have their own iPads.

I could hardly believe it when the people who know this kind of stuff said that Americans were expected to spend $370 million this year on Halloween costumes - for their pets!

Watch Out for Afluenza

Affluenza is a term for conspicuous consumption - the deliberate consumption of goods and services intended to provoke the envy of other people as a means of displaying superior status. People with this 'disease' tend to be overworked and stressed - in pursuit of the American Dream and trying to keep up with the Joneses.

This leads to a disfunctional relationship with money. No one wants to wait to buy something until they can actually afford to pay cash for it. It is so easy to pull out that credit card and get it right now. They somehow forget that they will end up paying so much more for the item when they include the interest.

Even very wealthy people constantly struggle to earn more, gain more, and get farther ahead. And yet they continue to feel unfulfilled. It is an unending struggle because someone else will always have a bigger house, fancier car, or more toys.

Diseases of Affluence

Diseases of Poverty are infectious diseases. They are caused by poor hygiene, unclean drinking water, lack of healthy food, and no vaccinations.

Diseases of Affluence, on the other hand, are non-communicable diseases. They are caused by too much of everything: too much sugar, too much fat, too much food, too much alcohol. The result is heart disease, stroke, obesity, diabetes, hypertension, cancer, gout, depression.

Be The Millionaire Next Door

The Millionaire Next Door: The Surprising Secrets of America's Wealthy surprised the world when it told the truth. The real millionaires are quiet about it. They tend to drive older cars, live in modest homes, and resist wearing the latest fashions. They are frugal. Their modest standards of living are one of the main reasons that they are millionaires.

Reducing consumption - buying only what you need - can allow you to pay off your debt, save more to retire early, or spend less time at work. You can use that extra time to pursue hobbies, read good books, and play with your children or grandchildren. Don't deprive yourself, but save your spending for the things that really matter. Buy quality and use it until you've used it up.

Some people forget what's important in life. They get so caught up in the pursuit of money and things that they don't leave time to spend with family and friends. Remember that the more money you spend, the more time you have to spend earning more money. It is important to maintain a good balance between work and life. Work to live rather than living to work.

Winning the Lottery

I once had a neighbor who had won $85 million dollars in a lottery. She was a young college student, single and pregnant. She lived in our neighborhood for about six months while her new custom home was being built. No one in the neighborhood ever got to know her, but it wasn't because we didn't try. She was invited to parties and picnics all the time, but she always turned down the invitations. She was sure that everyone was after her money. Later, I heard that she had complained to someone that she hated living there - everyone was unfriendly!

When I used to buy lottery tickets, I dreamed about what I would do if I won. Of course I thought about buying a new house and a new car, but I never pictured anything big and fancy. The thing I really looked forward to was all the good I could do with that money. I thought about how good it would feel to see or hear about someone who needed help and actually be able to offer that help without worrying about going broke myself.

Just Refuse to Play the Game

Well, I'm not going to win a lottery because I don't buy tickets. But I do own a modest home free and clear. I love this house and have no desire to live in anything bigger or fancier. I make small improvements each year - I can hear the man putting in my small fireplace right now as I write - and each year I love it more and more.

I drive the ten year old Honda Accord that my mother bought a year before she died, and I hope it will last the rest of my driving life. (It only has 70,000 miles on it.) It's kind of beat up on the outside from eight years of driving and parking on narrow cobblestone roads that were never designed to handle so many vehicles. But the inside is almost like new, the ride is very comfortable, and the mechanical parts are reliable.

While some people feel like they need a big house and a new car, I would rather spend my money on experiences, especially travel. And even there, I don't waste my money on fancy hotels and meals. I'm there for the history and the culture and to meet the people. I'd rather travel cheap and travel often.

1 comment:

  1. What a great book that was, The Millionaire Next Door. Had a huge impact on me and my early retirement dreams.