Minimalism
00:00:00.000 | Hello everybody, it's Sam from Financial Samurai and in this episode
00:00:03.420 | I want to talk about a series of unfortunate events that has led me to conclude that
00:00:09.020 | Early retirement and minimalism go together like peanut butter and jelly
00:00:13.820 | perfect combination
00:00:16.080 | One supports the other if you're a minimalist it helps lower your costs and helps you get to early retirement quicker
00:00:23.040 | And once you're in early retirement
00:00:25.360 | Well, if you're a minimalist you get to keep your costs low and it helps you sustain your early retirement lifestyle further
00:00:33.000 | The more minimalistic you are the less things break
00:00:36.840 | Everything breaks over time as a result. You've got to spend time fixing it maintaining it replacing it
00:00:43.640 | What a pain and when you have a lot more freedom your time is actually more valuable and therefore your opportunity
00:00:50.520 | Cost of not doing something you really enjoy is higher
00:00:54.280 | So for example, let's say you have a sick kid. You've got to take time off work to take care of your sick kid
00:00:59.660 | Of course, it's a bummer, but you've got to do what you got to do
00:01:02.620 | But the upside is you don't have to go to work. You have a valid excuse to take one two, three four days off and
00:01:10.280 | You'll still get paid. That's pretty good. Well, that's not that bad, right?
00:01:15.960 | Well, let's say you are an early retiree who can do whatever and you're really into pickleball all of a sudden like I am
00:01:22.640 | You play from 10 a.m. To 1 p.m. Every single day when the Sun is shining
00:01:27.480 | Well, if you have a sick kid, you're gonna have to give up your pickleball
00:01:31.760 | One of your greatest joys right now to take care of your child. You're definitely not gonna get paid doing your parental duty
00:01:39.040 | So isn't it a little bit ironic that if you have a day job and the more you dislike your day job
00:01:45.040 | The happier you are to do something else. So the opportunity cost is lower to do something else
00:01:51.120 | What I realized from writing my post on minimalism and early retirement going perfectly together
00:01:57.000 | Is that whatever we do it tends to get more complicated over time?
00:02:02.900 | Whether it's having children our
00:02:05.720 | Investments buying cars houses clothes. There's no natural path to simplicity
00:02:12.920 | It's actually a natural path to accumulating more and more stuff and you can do that as you gain
00:02:20.960 | More and more income and wealth and so these things are highly correlated more stuff more income more wealth
00:02:27.400 | So to live a better life, we actually have to be
00:02:29.880 | intentional with trying to keep the creep from growing too big keep the
00:02:36.320 | accumulation of jeans and shoes and all that stuff to be more intentional about simplicity and minimalism, so
00:02:43.640 | Actually trying to be more minimalistic might just simply throttle your accumulation of more stuff over time
00:02:50.600 | It might not actually make your stuff go down and then over a course of let's say 5 10 15 years
00:02:57.040 | You're gonna have a house full of stuff with things
00:02:59.560 | You don't even use don't even need and it'll start really weighing down on your psyche in my post
00:03:05.720 | I talked about five things that have been
00:03:08.120 | Weighing me down one cars. I've had one car for 20 plus years. I love cars
00:03:14.600 | I was a car fanatic who would trade in and out every one to two years in my 20s and early 30s
00:03:20.360 | but then at some point I was like
00:03:22.320 | You know
00:03:22.600 | This is just too much hassle buying and selling and maintaining and when I went to Lake Tahoe this summer
00:03:27.920 | The valet just bashed my car. Actually, they didn't bash my car
00:03:32.160 | I guess some laundry truck did and I whipped around I was like what's going on? It wasn't just a little ding
00:03:36.880 | It was a huge gash that took about nine hours of my time
00:03:41.360 | So time wasted and it took two and a half months to get my car back all the stress planning
00:03:47.440 | To go back to Lake Tahoe to pick it up to arrange
00:03:50.800 | Car transportation a rental car to deal with insurance agencies. What a pain in the butt. I was thinking myself, man
00:03:57.920 | I wish I had zero cars, but I need a car
00:04:00.920 | I need a safe car to shuttle my kids back and forth to school and to doctor's appointments and playdates speaking of kids
00:04:07.740 | Whoo having kids really complicates your life because you care more about them than anything in the world
00:04:14.800 | They'll get sick, which my kids have been sick off and on for the past two and a half three months crazy
00:04:20.800 | Tridemic right with RSV flu coven 19 and then they get us a sick
00:04:25.680 | So in retrospect having one child really was like a walk in the park compared to having two children and then having no children
00:04:32.160 | Man, that's just be crazy freedom. I was talking to my wife the other day
00:04:36.440 | We're at the mall and I was thinking man
00:04:38.680 | Can you imagine if we just had no children and we can just go eat in the food court?
00:04:43.800 | Maybe watch a 9 p.m. Movie come back at 1130 sleep in that would be nuts and it's such a different world now
00:04:51.020 | Of course, we're never gonna trade our children for anything in the world
00:04:54.740 | We love them so much, but we responsibly figured out that two was the most we could comfortably handle
00:05:01.860 | You know before having children we never fought after having children we fight more often because we're tired
00:05:07.420 | We're cranky the kids aren't sleeping and there's just a lot more to do
00:05:12.760 | So even with children there's a minimalism aspect, you know, there are plenty of early retirees out there with no children
00:05:19.920 | You know, they live in a one-bedroom apartment or maybe even something simpler
00:05:24.120 | It's very carefree and that's something everybody should think about
00:05:27.800 | What is your limit because if you have so many children that you're miserable all the time you end up in a divorce
00:05:33.360 | You know shouting matches. It's bad for the kids. That is you know, that's tough
00:05:38.560 | That's not that's a suboptimal situation and we really don't know how far our limits can go
00:05:45.280 | but I think it's probably wise not to get to our
00:05:49.360 | Limit limit or surpass that limit because once you have children, you know, there's no going back, right?
00:05:55.620 | All right
00:05:56.360 | In addition to cars and children property the reason why I don't want to own any more
00:06:01.600 | Physical rental properties or properties in general is because something always breaks, you know
00:06:06.880 | one property had a bike stolen out of the garage because supposedly the side door was left unopened when my
00:06:13.600 | Sister and boyfriend visited - there's a cracked pipe in one of my newly remodeled rental properties
00:06:20.680 | It was remodeled in 2020 and then both sides of the p-trap cracked and I saw it. I was like what what's going on?
00:06:26.960 | So I had to spend Saturday
00:06:28.480 | Corresponding with my tenant finding a handyman paying 150 dollars to fix it and it was just unnecessary
00:06:34.760 | Stress and then in December all my electrical outlets in my primary bedroom
00:06:40.240 | Stopped working. It was all of a sudden. I was watching World Cup soccer Saturday morning
00:06:44.560 | I came back to my room and nothing was turned on. I mean what the heck how random is that?
00:06:50.120 | So I had to get a handyman. I hired an electrician for $145 an hour and this just takes more stress and more time
00:06:58.660 | And oh, yeah in
00:07:00.660 | January no, yeah, February 6
00:07:03.680 | 2022 I ended up fixing a leak at my rental property and I end up repainting the entire house and that cost
00:07:10.600 | $20,000
00:07:12.720 | so things just
00:07:14.720 | Naturally atrophy things break get old and you've got to keep on maintaining it over and over again
00:07:20.880 | So from now on all my cash allocated towards real estate will go to private real estate
00:07:27.880 | Investments or public REITs this way. It's a hundred percent passive
00:07:31.800 | I can still earn the passive income and not have to manage anything. Everybody's got to find their own limit
00:07:37.600 | Oh, and there's another thing as I was driving back home after dropping off my son from school. I saw this beautiful
00:07:44.000 | Victorian house, it's probably like forty eight hundred square feet five bedrooms, you know, just classic
00:07:50.880 | 1896 built and I was thinking myself
00:07:55.440 | Hmm, there is no way I'm ever gonna buy a house like that because all I can think about are where are the potential
00:08:02.640 | Leaks and maintenance issues during this winter
00:08:06.720 | Maybe the wiring is old and it's knob and tube instead of a Romex wiring. So at some point in your life
00:08:13.160 | I'm 45 now you might no longer want to own that big
00:08:17.720 | Expensive beautiful house. You might start looking at all the luxury mansions out there and think
00:08:24.160 | Hmm what a nightmare to maintain
00:08:26.820 | So if you really want to enjoy property
00:08:29.700 | It might be best to get that really nice house before your life gets so complicated
00:08:35.580 | So so far we've discussed about having more children more cars more homes
00:08:41.240 | well
00:08:42.060 | what's interesting also is that as you get older and wealthier your net worth gets more complicated and the more
00:08:49.480 | Complicated your net worth the harder it is to track and so when you can't track everything
00:08:55.240 | Well, you can't remember everything. Well, there's always this niggling kind of like did I miss something? What am I doing wrong?
00:09:02.200 | Is something at risk of exposure that I'm not aware of and so that's why we have tools like personal capital
00:09:09.640 | You can sign up at financial samurai.com forward slash PC to track all your accounts
00:09:14.480 | It's similar to you know feeling less stressed once you write everything down on a to-do list on a paper or a whiteboard on a
00:09:21.160 | Refrigerator you feel more at ease because as those tentacles grow
00:09:26.280 | It just seems so unruly to track and there is something to be said about just having most of your net worth in
00:09:33.400 | real estate or in the S&P 500 or there's actually something to be said about having no investments and just
00:09:40.880 | making a living by working or
00:09:43.040 | generating truly 100% passive income such as let's say from music royalties or book royalties, so be aware of
00:09:52.080 | net worth
00:09:54.360 | Complications net worth creep as well. It's probably gonna happen to you, especially as you get wealthier
00:10:00.560 | Oh, man, you know
00:10:01.640 | Please put together your death file of all your usernames and passwords and put together that a revocable trust with a good
00:10:08.240 | trustee or list of trustees to help
00:10:10.880 | Figure things out just in case
00:10:13.360 | Alright, and finally something interesting part of my life
00:10:16.440 | Which you're listening to right now is the financial samurai podcast and the financial samurai blog and then there's the newsletter
00:10:23.680 | between 2009 and
00:10:26.200 | 2012 there was just financial samurai
00:10:29.640 | I would write three posts a week and then respond to comments and that was that but since I left in
00:10:36.280 | 2012 there has been
00:10:38.280 | Online media creep, you know
00:10:40.400 | I started creating a newsletter to keep in touch with people who really wanted some more personalized and special information
00:10:47.680 | And then I started recording this podcast. I think starting in
00:10:50.720 | 2016 2017 it was off and on for the first couple years, but then recently over the past two three years
00:10:56.960 | I've been very consistent and then I did some video interviews during my buy this not that book tour and I decided there's no way
00:11:04.880 | I'm gonna do YouTube as well. So as you can see there's this creep it fills my time
00:11:10.480 | Even though I have two kids even though I'm very busy
00:11:13.360 | It's I just can't help but try to do more and more and more which is why I've
00:11:18.680 | Really become more strict on sticking to 20 hours a week or less on financial samurai
00:11:23.740 | Otherwise, I would probably spend easily 40 50 hours a week doing everything I can because I really like it
00:11:30.740 | But I know it's just not healthy because also
00:11:33.720 | things tend to break for example, if you are old-school and get financial samurai posts via an
00:11:40.040 | RSS reader like feedly
00:11:42.560 | You'll notice that it stopped working for a week and there's two thousand plus of you
00:11:47.680 | And the reason why is I guess some new plug-in had old code that conflicted with the PHP in
00:11:55.080 | the background of financial samurai
00:11:57.240 | So it caused these posts not to release on the RSS feeds and on my email feed as a result
00:12:04.080 | I was more stressed
00:12:05.480 | I didn't do anything wrong
00:12:07.120 | So I had to talk to my system
00:12:08.380 | Administrator who has been working on this for the past week to fix it and clean up the back end so it'll work better
00:12:13.800 | Why does this stuff happen every one or two years?
00:12:16.960 | Well, it's because any kind of software technology always has bugs and whenever there's an update
00:12:22.680 | Those bugs tend to come out and conflict with each other
00:12:26.280 | So now I've got to spend $400 and just try to figure it out if I was a minimalist
00:12:30.980 | Mmm, I would cut down on this online stress and online activity
00:12:36.340 | So maybe maybe in 2023 and beyond I should just focus more on one thing
00:12:41.920 | newsletter podcast or
00:12:44.520 | financial samurai calm this work creep is
00:12:47.960 | What most entrepreneurs deal with and the most gung-ho worker bees deal with as well
00:12:54.680 | There's always something new to do and if you have a job that is correlated highly correlated with reward
00:13:00.680 | Then the natural inclination is to just work harder and do more and more stuff
00:13:05.680 | So if you want to be a minimalist, you've really got to be specific on what is enough
00:13:11.800 | How much is enough what gives you fulfillment and purpose because if you're not specific in your goals and your limitations
00:13:18.720 | This creep of everything that we do and everything will have will continue to grow and grow and grow
00:13:25.320 | Alright, thanks so much everyone. I hope you enjoyed this episode
00:13:28.800 | And if you liked it, I'd love a positive review you want to subscribe to my newsletter
00:13:33.680 | It's at financial samurai comm forward slash news and if you want to support my book this holiday season
00:13:39.560 | It's by this not that at financial samurai comm
00:13:42.920 | forward slash
00:13:45.360 | Nt because of the book success
00:13:47.360 | I'm actually considering
00:13:49.640 | signing a second book deal and thanks to all of you for supporting it and
00:13:53.920 | This puts me at a crossroads because I just said maybe I should focus only on financial samurai or the newsletter or this podcast
00:14:01.820 | so if I introduce
00:14:04.040 | Book writing a second book again. My life isn't getting simpler
00:14:08.600 | But maybe there is a solution to this desire to keep writing and maybe there is a simplicity in writing
00:14:15.640 | That I'll soon find out
00:14:17.640 | Stay tuned