Minimalism for Financial Independence

The concept of minimalism might spark a myriad of different ideas in everyone brain. Truth be told, minimalism means different things to everybody and there isn’t really a definition, but I like this one;

“It is marked by clarity, purpose, and intentionality. At its core, minimalism is the intentional promotion of the things we most value and the removal of everything that distracts us from it. It is a life that forces intentionality. And as a result, it forces improvements in almost all aspects of your life.”

www.TheMinimalistVegan.com

I like to think of myself as a bit of a minimalist although I’m not very hardcore by any stretch of the imagination (I live a very cushy life with heaps of luxury things I could do without). What Minimalism means to me is to be mindful or deliberate with what I am doing, especially with my finances.

I try to get rid of excess ‘stuff’ and live a lifestyle that is based more on enjoying relationships, time and experiences rather than material possessions. It means simplifying my life so my brain doesn’t have to keep track of everything and instead it gets to relax and focus with calm clarity.

How I discovered minimalism

For the benefit of any newcomers to the Blog, I travel a lot. I work full time international cargo pilot, and have family scattered all over the world. I’ve also moved on average every year for the past decade, so I am no stranger to travelling light or packing up my life and relocating. But did you know travel also stresses me out? Especially when there is a heap of stuff to come with me…

roadtrip
Time to hit the road… Again

This almost nomadic lifestyle started long before I was flying full time. I studied as an Engineer, and worked several other jobs on the way such as in a call centre, doing data entry, operations management and heck even as a cleaner where I removed graffiti and picked up trash and cigarette butts at shopping centres. As I worked my way up into my dream career I took many entry level flying jobs such as scenic flights and even ended up teaching people how to fly light aircraft for a while.

This led to frequent interstate relocations, and it just wasn’t practical to take all of my things with me. Because I was trying to keep costs down and not take on any debt on my journey, minimalism was more like a requirement, not a choice. I was making use of communal living arrangements like room sharing with a very small footprint.

Every time I moved I would try and whittle down my possessions even further by listing them for sale and converting as much as possible back into cash. Anything that couldn’t fit into my ’99 4cyl Coupe, on the roof racks, or in 6×4 trailer wast coming with me. It was just too much effort and too tiring to lug everything around, and removalists were expensive and out of the question.

This helped me stay more flexible and portable, and helped to keep my cost of living right down. This in turn meant I could put as much of my savings and any spare cash into my flight training as possible.

It also meant I didn’t accumulate much junk, and I only ever had things I really needed or which I valued; everything else got turned into cash and got thrown into the money pit that is commercial airline aviation training. This ended up costing around AUD $300K but thankfully I never had to take a student loan and pay interest on this balance as it was all paid for in cash, incrementally.

If you want to read more on my journey specifically, check out My Journey to FI

Life on the road, mostly…

After getting qualified, hired and type-rated on my current aircraft, my life now has a more ‘permanent’ structure being based out of Sydney, Australia, but I still get to satisfy that ‘Wunderlust’ with frequent and long overseas trips.

fly
Movement, and change is the natural state for a lot of pilots. An aircraft belongs in the clouds, not in a hangar after all…

Travelling for work has been a unique experience. I’ve learned what I need and what I don’t need to take on the road. Some trips have been overnight, some trips have been several months at a time and actually felt like moving all together in itself. It’s been a great experience seeing the world, and becoming more confident in my interactions with that world.

When I started with my first few overseas trips I did not pack light. I took suitcases full of ‘stuff’…

  • Spare uniforms
  • Recreational clothes
  • An iron
  • Far too many toiletries
  • Towels
  • Shoes
  • Laptop etc etc etc…

Which was not really very practical at all. In the end I found I wasn’t using half of it anyway, so over time pared down what I take in my travel bag. These days I like to pack light, taking just enough for the trip with maybe a couple of days worth of safety factor.

What you can do without

Cutting down what I take away on flights made me realise there is quite a lot I can actually do without and made me remember my student days. I have a few nice things that make my life easier – for example I really value my noise cancelling headphones (Bose Q35), gym earbuds (Bose Soundsport Plus) and aviation headset (Bose A20), as well as my iPads for flight planning, reading and blogging. But otherwise my bag just has the usual stuff. Socks and jocks, a spare uniform, gym gear and a toiletries bag.

After having fun optimising and cutting down my travel bag I turned my attention back home. I looked at what I had in my apartment and realised that my bad travel habit had started here – During my time in Sydney where I now had a permanent place to base myself out of, I had started to collect quite a lot of things in my apartment (which to be fair is only a 1 bedroom apartment). Time to get back to my roots!

Investing style

I made a deliberate choice with my investing style to focus on passive index fund ETFs and LICs because of the ease and simplicity of buying, historical performance (you cant under-perform the market if you ARE the market!) and ease of holding / accounting / tax reporting, so I reasoned why not try to take inspiration from minimalism in other aspects of my life?

Tidying up

In line with Marie Kondos ‘The Life Changing Magic of Tidying Up’ I started to remove the stuff I didn’t really value or use. I remembered there is actually a lot of stuff you can do without, but somehow my ‘Crow Brain’ nesting instinct had slowly been causing me to gather items for my ‘nest’. Why on Earth did I have 6 red wine glasses, 6 white wine glasses, 6 champagne flutes, 6 martini glasses, 6 scotch tumblers and 6 hurricane cocktail glasses?! When would I ever need to simultaneously serve 36 drinks?!

I started by making a rough mental list about when I last used things. I figured if I hadn’t used something in a year, it was going. If I had multiple of the same thing, the duplicates were going. Some of the first things I listed on eBay included dress shoes, collectable coffee mugs, pins and badges, Parker Pens, old textbooks, electronics and collectable coins – anything that can be posted easily.

selling
Online selling is a Great way to de-clutter and generate cash

Within the first month I had made over $1000 selling my surplus things. eBay is a good tool for selling as you don’t even have to meet the buyer – it takes 30 seconds to create an ad which is largely autonomous and will repost itself until the item sells. It is a slight hassle communicating and posting, and of course eBay charge a fee, as does PayPal (I would recommend you use PayPal as opposed to handing out your bank details). These fees slightly lower your return but it’s worth it for the benefit of the services they provide IMO. Local classifieds are great for larger items.

If your after some tips on how to sell your stuff online more quickly and efficiently, check out my dedicated blog article on how to sell your stuff online here

Mental health

Decluttering my apartment PLUS generating extra money which I can use for investments was a huge win/win for me. I think having a clear, clean, decluttered and deliberate space to live in is important for your own mental health and wellbeing.

Have you ever tried working on a cluttered desk? It’s hard! I often have papers, journals and textbooks scattered over my work space, alongside rulers, pencils and calculators. Increasingly I’m using my iPad to access information too so there’s usually that, too. Sometimes I even need to use the dining table to have enough space, especially when sketching technical or scale drawings of satellites or components. It can feel tricky just to keep track of it all!

Decluttering my table lets me focus on my work and not feel overwhelmed by the huge amount of papers I need to sort though. Which helps me get my tasks done quicker and with a clearer head. The same can be said for my living space – clean, clear and decluttered helps to promote good mental health for me and makes it more enjoyable to be in the space. Decluttering the apartment has been great for this, it’s allowed me to focus on enjoying the things that I value and not waste my time, space and energy on the things I do not.

Classic Me taking it too far

So anwyay, like with most things I do, my dopamine fiend of a brain got addicted to selling stuff and probably took it too far, which I kind of now realise and treat as a bit of a game of how much can I sell and for how high. I used to hate negotiating because of the perceived ‘conflict’ but now I find it fun. I will admit that sometimes I even buy things I don’t need purely because I know I can quickly flip them for a profit on eBay.

This has also helped to reinforce the importance of being mindful about my spending; I usually consider the hassle of having to sell something if it isn’t what I want or if I don’t use it!

But what I started to realise was that as fun as it is, it can take up a lot of your valuable time if you let it. Time which is your most important resource. There is a law of diminishing returns so I would say just like investing, you should ‘set and forget’ your listings and just wait for buyers to contact you, don’t bother checking them. Concentrate on the important things.

Why minimalism will help you reach FI quicker

The reason why the concept of minimalism will help you to reach Financial Independence is simple. Its because minimalism promotes the virtue of mindfulness; that is being deliberate with your actions. It promotes efficiency; taking only what you need and not wasting resources (time, energy or money for example). Financial minimalism can be thought of as simply as fulfilling your needs and then choosing to invest the surplus via a diversified index fund ETF, rather than going out and trying to beat the market.

Being a minimalist doesn’t mean you have to live an incredibly Spartan life and only have one pair of shoes. Subscribing to the philosophy just means you are being mindful of your place in the world, and practising gratitude for what you have. It helps you to avoid trying to fill any gaps in your life or happiness (for example being lonely) with buying crap. It helps you to surround yourself with high quality people, and possessions that actually mean something and that you value. It gives you room to move, and to breathe.

Practising mindfulness and deliberate minimalism are essential traits for those on the path to FI, and you will probably find yourself already aligning to many of these philosophies already. This is because it will help you to maintain a low cost of living and increase your investing capability, or firepower have you will. I have written extensively about many different ways you can employ minimalism and mindfulness with deliberate planning to reduce spending and your cost of living – check out some of them here.

Ultimately, reducing your cost of living means only one thing for your saving rate – it goes up! And when your saving rate (and investing rate!) goes up, you automatically cut down your time to reaching FI. If you can cut your cost of living down to only 20% of your post tax income (an 80% saving rate) you can reach Financial Independence in as little as 5 and a half years!

What are some ways you have been able to practice mindfulness and minimalism on your path to Financial Independence?

CaptainFI

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