The boomers may have shaped the current economy, talked us into student loan debt by pushing us to study, and encouraged the 9-to-5 job life, but one thing I fear they haven’t passed on well enough is the importance of being self sustainable; like our grandparents (and their parents) had to be.
To me being self sustainable means knowing how to do certain things, and being able to teach yourself to do things you don’t know (you know, otherwise called being an adult). Things like knowing how;
- To cook good, healthy nutritious food at home
- To run a household; set a budget, pay bills on time, and keep the household clean.
- To maintain your own car
- To fix things around the house and
- To grow or gather some food.
Wear it out, don’t throw it out
My grandparents lived by the motto “Wear it out, don’t throw it out” in a typical frugal Scottish fashion and retired early to a life of financial freedom on their slice of heaven on a several hundred acre farm in the hills, tucked away in their very own forest.
Earlier today I put on an old cotton T shirt for a workout which was a bit tatty and had a few holes in it – obviously my holy Sunday best! By the end of the day when I took it off it was well and truly worn out, beyond repair. So I turned it into a few cleaning rags and ‘oily rags’ for working on the car. Wearing something out is oddly satisfying to me, and I think my dearly departed Grandpa would be proud.
Rather worryingly, I hear about the ‘expensive cost of living’ pretty frequently from some of my friends and colleagues. Most of these are people that earn over 6 figures. I agree somewhat; it is hard to build wealth when you’re haemorrhaging money left right and centre. Keeping up with the Joneses and the latest trends, paying for house-keepers, continually shouting rounds for everyone (who don’t reciprocate) and trying to get on top of consumer loans for flashy cars, credit card repayments and personal loans for holidays is enough to keep anyone poor. The irony is, trying to look or act rich is the surest way to keep yourself anything but!
If you are determined to become financially independent, learning how to do things for yourself and be efficient is one of the most important skills you can master. A dollar saved is more than a dollar earned due to taxation implication on earned income. Being self sustainable is a super important part of FIRE; being frugal and reducing expenses is the best way to maximise your savings to make investments.
Self sustainable ‘Frugal’ luxury
I live a pretty amazing life for someone in their twenties. I consider myself incredibly lucky and thankful for everything that I have. I am not saying this to try and brag (I mean, telling people how much I save by shopping at Aldi is kind of a weird flex) but rather to point out how being self sustainable allows me many of life’s luxuries whilst still being able to save a whopping 84% of my wage (which goes straight into ETFs and rental properties).
- I rent a brand new luxury apartment (1.5 br with undercover parking) in the most expensive city in Australia thanks to my employers rental assistance scheme which covers half of the rent.
- I have an amazing smart phone (so what if it’s a few cycles old?) and tablet which I can use to communicate instantly to friends and family all over the world.
- I have a wonderful relationship and hang out with close friends multiple times a week, going to and hosting dinners, and mixing drinks from my generously stocked bar and single malt collection.
- I have a fridge that is bursting full of fresh fruits and vegetables, and a cupboard stocked with ingredients to make incredible meals
- I have high speed unlimited internet connection
- I drive a car that still feels brand new and that has never missed a beat (despite being over 13 years old and having 90,000kms / 56,000 miles on it)
- I ride a Supersport motorbike which feels like I’m riding a cross between a fighter jet and a stallion that’s been kicked in his bollocks.
- I am getting a free world class post graduate university education.
- I have what is possibly the world’s most comfortable bed – a mattress and 1000 tc sheets which I begrudgingly leave if I’m working early shifts.
- I have more than enough space to work on projects from home and still have room for friends and family to stay over – on a li-lo of course, I’m not made of money! ; )
- I travel the world for my job as a professional pilot, and have an apartment (minimally) furnished and decorated with some really cool stuff I have picked up along the way.
I manage this amazing lifestyle all on a touch under $17,000 a year or $650 a fortnight. Of course, the occasional unforeseen expense threatens to push this number up, like when I dropped my phone and needed a new screen (thankfully I found a $12 replacement part on eBay). Travel and meal allowances also really help when I am away from home flying, and I usually don’t even manage to spend all of them during trips.
I know I am really fortunate to have scored a job with good benefits and not everyone is in this position to be able to save as much as I do living alone. To get to this position I have worked pretty hard in numerous jobs to put myself through flight school (which cost me around $300K) and the reality is that I still earn under the industry average due to my lack of seniority. I have friends working for airlines earning double what I do, and who seem to work half the shifts.
All in all I really don’t want for anything (except for maybe more free time), and I am incredibly content with what I have. Especially because I know my hard earned dollars are going into investments which will fund my future life as a stay at home dad where I will hopefully get to raise a big family.
I generally try to avoid the topic of finance in public or with friends, but if people ask me directly then sure, I’ll fire up and get right into discussing saving rates and investments!
Don’t be a cheapskate
Whilst I am a staunch advocate of being self sustainable and mindful with money, being a downright stinge or cheapskate can be annoying and will alienate you from your peers and friends.
Don’t skip out on every social engagement and certainly don’t expect anyone to pay for you; the whole point of Financial Independence and FIRE is to focus your efforts on things you value, and good quality social engagements should be one of them. If you don’t prioritise this, I promise you that you’ll turn peculiar. I always make sure to have a couple of beers with my mates when I can, and I always try to get the first round (and then I don’t participate in future rounds).
Tips to be more self sustainable
The easiest way to figure out how to be more self sustainable and make your budget work as hard as you do, is to simply look at your outgoing expenses. Look at what you pay other people to do, and work out how you can do it yourself. I’ll caveat that whilst this is generally a good way to manage your personal finance, some things just aren’t worth doing (or learning to do) yourself – septic tank plumbing is one of the things that comes to mind. Especially if you run a business, you’re better off getting a team of qualified people to work for you, to achieve your goal quicker.
Some of the biggest impacts to my bottom line has been to…
Service your own car
Learning to service my own car means I have been able to stay away from the ‘stealerships’ service depots and have saved thousands of dollars a year. Servicing your car is not for everyone; I have a technical background in engineering and experience working in aircraft maintenance which helped, but I have had no formal training on cars other than YouTube and a Haynes service manual.
If you’re not mechanically minded then probably don’t try and service your brakes, but certainly have a crack at doing an oil change yourself. Over time you will learn and get more savvy, and a DIY oil change costs about $40 as opposed to $349 that I was quoted at my local stealership.
Eat your Avocado toast at home
Whilst there is a joke in here somewhere about being a millennial, avocado toast and home ownership, I’ll stick to my point. Paying $25+ for half of an avocado smashed onto 50 cents worth of bread doesn’t make sense to me. That one serve of avocado toast at the trendy brunch cafe could pay for almost half of my weekly grocery bill!
You can call me a stinge, but I enjoy my avocado toast at home, sitting on my sunny balcony, and usually with a big pot of brewed tea. Occasionally I’ll make a coffee using my fancy espresso machine that I think rivals most of my local cafes (although I don’t consider myself a coffee snob I certainly appreciate a good brew). When friends invite me out to brunch, I usually just roll my eyes, eat at home anyway and then just join them for coffee. I’d rather that brunch money went straight into investing towards FI in stock market index funds. I am more likely to feel less guilty about spending the dividends that the index fund portfolio bring in.
Learn the value of a dollar
Learning about money, especially through investing, has given me a really good appreciation of the value of a dollar. This has helped me when I ‘bitch or switch’ with companies providing me services like my telco or car insurer (especially when you’re up for renewals). The stock dividends start out really small, so I want to protect and be reinvesting as much of them as possible to benefit from compounding returns.
Upcycling is the process of getting second hand, and making it better. For example, in my article about how to furnish your apartment for less than $1000 I talked about how I used online classifieds to find cheap or near to free furniture (and even a coffee table I found on the side of the road).
The sad reality is that most of this stuff is still perfectly fine, but wasteful people wanting to ‘upgrade’ will try to get rid of it, and unless it is upcycled it will usually skip right past recycling and end up in landfill. With a bit of elbow grease and a good clean, re-oiling / staining or a lick of paint, you can find yourself some amazing pieces like coffee tables or bookshelves for a fraction of the price of what you see in a flashy showroom.
Learn to cook
My friend’s partner was recently at a loss for words when I had them over for afternoon tea. We were discussing meal preparation – which is something I do; I cook meals in bulk and then freeze them so I always have a supply of awesome, nutritious meals that all I have to do is reheat or maybe boil some pasta for.
So she had mentioned they had started a food subscription service for Hello Fresh or something similar (essentially they deliver ingredients for you and you cook it at home because you don’t have time to even go shopping in your busy schedule but you do have time to cook apparently…). I asked how much this cost, and she replied “about $20 per meal for us two” which left me with a shocked look on my face. Eager to return the favour, I told her that my meals cost on average $1.50 per serve to make, and we just sort of stared at each other blankly for a while.
The reality is that learning how to prepare a proper meal at home isn’t just something you should do to save money, it’s an important life skill. Making a great meal at home is very satisfying, and you know you’re getting good quality, healthy food rather than the junk most restaurants dish up. I love getting creative in the kitchen and trying out new ingredients and cooking styles. It’s becoming one of my favourite hobbies, and I enjoy perusing local markets and shops for seasonal produce (that is sold on special) and figuring out what I can make with it.
P.S. Chicks like guys who can cook!
Enjoy No or Low cost activities
You don’t have to spend money to have fun! My top list of fun no spend activities includes;
- Visiting the beach or the river for a swim
- Hitting the trails on my mountain bike
- Free camping by the river
- Hiking and walking trails
- An intense gym workout
- Reading books (Finance, psychology, investing, science, technology, aerospace are some of my favourite topics)
- Board game night at home (or at a friends)
- Building websites
- Playing guitar
- Learning languages
Learn to appreciate and make do with what you have
It is human nature to want more. But learning the difference between needs and wants is a crucial skill for those chasing FIRE, and you can save yourself thousands of dollars a year by restraining yourself from unnecessary splurges (like new shoes when your current ones are perfectly fine).
Buy quality once, and then look after it
My mother always said to me “The quality is remembered long after the price is forgotten”. I think that came from someone trying to sell an expensive car or whatever, but I think it’s still a valid point.
For example, if you checked out my kitchen you’d only see a handful of stuff; for example I only have a couple of high quality pots and pans and knives, but one amazing knife in particular. Although it was nearly $100, this knife really has held its edge over several years and I always makes sure to wipe and dry it after using it (and never dishwasher it). It’s one of my favourite kitchen items and whilst cheaper knives have come and gone, this one remains.
I have a beautiful pair of brown leather boots (RM Williams leather Craftsmans) which I wear as part of my flying uniform. Although these were nearly $500 at the time, I have had these boots for over 6 years now and they look just as good as the day I got them.
That is because I have looked after them; cleaned, re-oiled and polished them. I even recently re-heeled them because I had worn down the sole; now they are good for another 6 years. To date, I have paid an equivalent of $80 a year for top of the range shoes, and if they last another 6 years that will be down to $40. How long do you think a cheap pair of $40 synthetic work shoes would last?
So in summary, learning to be more self sustainable could really accelerate you towards Financial Independence so you can Retire Early. I hope you’ve been able to take away some great lessons and that this inspires you to be a bit more self-sufficient and learn some new skills rather than just paying someone to do everything for you.
Get FI !