In a (reasonably) recent post I alluded to the fact that things breed more things. We all know we have too much clutter in our lives. If you look hard about some of the clutter in your life you’ll probably realize that there is a chain reaction to many of the things you have bought previously.
Most companies have two main ways to keep revenue and profits growing
- Sell stuff to new people
- Sell more related stuff to the existing people
This presents both a threat and an opportunity to a humble financial independence seeker like me as I’ll describe below.
Think about it. When you buy your nice shiny Apple iPhone you’ve almost certainly signed up to a whole host of other expenses
- A plastic case to protect your precious
- Maybe an additional charger to keep at work and certainly one for the car
- Numerous app purchases that you’ll likely use just a few times before deleting and forgetting about them
- Music/videos/films form the iTunes store
Of course you’ll be so enamored with the user experience the phone gives you you’ll most likely end up buying a MacBook, iPad and Apple TV too. The ‘upsell’ as it is known in the business is how Apple have become such a profitable company.
The real kicker is that before you know it all those apps will be draining your battery and hogging the memory of your phone that you’ll eventually give in and upgrade to a newer model. Rinse and repeat until you’re a poverty stricken pensioner that can no longer afford a phone that tells you how happy and successful your old school friends think they are on Facebook.
A few years back a friend of mine explained the above example to me by making the following statement:
Their products are so damned good that once you start using them you’ll never want to stop. You might as well sign up for a subscription to Apple Inc.
That straight away got me thinking about Apple as a potential investment and prompted me to research the company more and eventually invest, which to date has turned out to be a very good decision.
Of course it’s not just expensive, over priced tech where an initial purchase leads to a never ending stream of expenses in the future. Consider for a moment mans best friend. Google tells me that the average cost of owning a dog is £1,183 per year (and if you think getting a cat is a lot less hassle then you’d only be marginally correct – they still cost an average of £1,028 per year to maintain).
Pets are damned expensive. Once you’ve bought them you need to keep them in rubber toys, feed them, treat them at the vets, replace chewed furniture etc etc.
If you need further proof when we moved house we ‘inherited a koi pond (minus the incredibly valuable koi) that I worked out was costing us a not insignificant £423 each and every year (minimum) to maintain. Pets are pricey.
Of course TEA offered a solution to this problem by recommending cloud storage for your possessions. In essence the argument says you should rent/hire instead of buying wherever possible or makes economic/time sense. If you do buy things then sell them and reclaim some capital back once they’re no longer regularly useful to you.
I like to call this the KISS (Keep It Simple Stupid) approach. I try to think long and hard before bringing things into my life. Before I do I ensure I’m fully aware what future things/expenses/time drain will also get added to my life as a result of the initial purchase.
You can apply the principles to almost any aspect of life. Here are a few more way you can keep things simple:
- Cycle instead of owning a car (for longer journeys just rent a car or take taxis) to avoid future maintenance costs
- Rent a house/apartment/room instead of owning, kissing goodbye to maintenance costs
- Subscribe to a music streaming service like Spotify rather than buying mp3 downloads
- Avoid purchasing holiday homes/caravans/camping equipment instead rent apartments or stay in hotels/homestays
Of course you need to use your judgment. I haven’t done any of the things above. However I have:
- Purposefully not upsized our family home after paying off the mortgage
- Gone pet free, including not getting a dog (see above) despite wanting one
- Regularly listen to internet radio stations1 as opposed to buying new music
- Realised that ‘upgrading’ a mobile phone is not obligatory
- Aim to cycle everywhere (station, shopping, simple chores etc) for journeys <10 miles
- Avoided buying the expensive automatic watches (that need servicing) like most of my colleagues wear, instead buying cheap, reliable quartz powered watches
- Gift my wife ‘experiences’ rather than material possessions
- Think carefully before taking up new hobbies (see below)
- Avoid recreational shopping
KISS Me Quick
I’ve mentioned previously that many of us FI types tend to have pretty compulsive personalities. I’ve recognized in myself that I have a tendency to obsess over new hobbies. If I do something I want to do it the best way. I have an inbuilt urge to refine and improve…which usually comes at a cost.
For example I’ve recently considered starting to experiment with brewing my own beer, ironically under the pretense of saving some money.
If I were to go ahead, I have recognized that I WILL have a very strong urge to quickly ‘upgrade’ my equipment and add complexity and precision to the process. There is a very real chance our garage would soon be converted to a stainless steel clad microbrewery. I’d likely spend hours trawling forums seeking tips and inevitably end up starting a blog about it too. It is certain I’d spend vast amounts of time and money making marginal gains to the taste of any brew produced.
It’s for this reason that I’ll keep things simple and continue to buy my beer. In fact the only thing on my Christmas list this year is a delivery from this wonderful place.
You Can’t Keep Everything Simple
Of course we all make mistakes2. I have recently committed the cardinal sin of ‘clutter attraction’ by having a child. The simple act of becoming a parent means it’s inevitable that thousands of ‘things’ will soon be flowing into your household in the form of cute clothing, plastic tat and pointless gadgetry.
However there is a way to minimize this. First you can avoid doing what most people do and not rush out to Mothercare and let them abuse your credit card. We’ve found that family and friends who have children are more than happy to give you the clutter they’ve accumulated…in fact most of them literally beg you to take it away.
Notes:
1. Despite a lot of rubbish there are a lot of great commercial free stations out there in most genres. Not only are they also help you discover new music.
2.In case my wife reads this I’m not saying I consider UTMT Jnr a mistake!
Ah… home brewing: my hobby of the last year. it’s great. I am here to make you see the error of your current ways ;-). To minimise set up costs I actually persuaded 2 neighbours to go in partnership with me: we bought all the key items between us (boil kettle, mash tun, cooling tube, thermometer, bottling device, siphon, bottling bucket etc) so it cost us £100 each only. We each own our own fermenter so we are not waiting on one person to bottle before the next can brew. Typically we share our brews 3 ways too, so one does not have 20+ litres of the same brew to drink before trying something new.One of my brew-buddies also has a new-born this year too before you try & use that** as an excuse ;-). **congratulations btw.
A cyclist here too…. my annual dream is to cycle more miles than i drive, but the family camping holidays to dorset/cornwall & visiting family in the midlands means i keep being off by a chunk…. just over 3000 miles on the bike YTD so far compared to 4,500 in the car. Still pretty good going i reckon. As my kids get older & i can do more weekend cycling with them I reckon I can hit parity around 4,000 miles apiece.
thanks for the detailed historical posts on buy-to-let properties by the way. they have been really helpful to me.
living cheap in london
thanks for the feedback. sharing the setup costs seems like a great way to minimize costs if I do start to dabble. in fact i vaguely know a guy down the road that used to brew and got to the point of setting up a micro brewery which he sold when he fully retired last year. i’m hoping i get an invite to some christmas drinks he’s at so i can see if i can tap into any kit/experience he still has 😉
cycling – sounds like you’re hitting a good ratio. maybe on family holidays you could cycle there to at least ‘keep up’ with the car miles. i do that occasionally if we’re visiting family…cycle there while my wife drives.
glad you enjoy the BTL posts. i’ve got a couple more coming up in my drafts….
“Pets are damned expensive.” – They can be, agreed, and personally I did not want the responsibility and expense of any pets, but I have kids and kids love pets and learn a lot from owning them. I believe I’ve found a good compromise you may be interested in: Rabbits. ~£80 initial outlay for a pair (with injections), and very little maintenance after that , maybe £100 a year if you include the odd inoculation. They run free range around my garden (with a tunnel back into their cage which they are free to go in/out of at anytime) and cut the grass and do the weeding for me(!), this means the food bill is tiny as only supplementary food is required (~£50 a year) and low maintenance as they do their ‘business’ in the garden, thus naturally fertilizing the lawn meaning the cage very rarely needs cleaning (rabbits are very clean animals given the opportunity, keeping them locked up in a hutch/run is what leads to most health problems and vet bills). In summer I can head off on holidays without having to worry about them as they can feed themselves from the garden (and drink from the pond – small pond I should add, upkeep ~£20 a year). The garden has to be reasonably escape proof/fox proof (on the escape side, the rabbits seem quite happy with the arrangement and have shown no desire to escape), for me this was relatively easy to achieve ~£20 for some wire mesh. In all, very low maintenance and low cost pets and the kids really enjoy having them running around when they are playing in the garden.
ep,
i’m fully aware that as UTMT Jr grows i’ll no doubt be under pressure to add some furry members to the family. i had pets as a kid so i’m fully aware of the benefit/joy they can bring.
rabbits. i currently have a problem with rabbits tunneling into our [walled] garden from the surrounding fields and annihilating our vegetables which aren’t in raised beds. my worry would be if i set up a nice hutch i’d be inundated with wild ones!
I don’t go to the nth degree with my hobbies like you do so my home brewed beer has actually saved me money!
Apart from time and effort (and a bit extra on my water bill), my latest batch has cost me nothing as the kit was a birthday present! The kits I buy usually cost around £20-£25.
When I no longer need to work, I’d consider taking my home brewing to the next step (ie boiling kettle, mash tun, like LCIL above), but for now, I’m happy with what I produce from premium beer kits!
Funny, I too have a kind of ‘brewing buddy’ – one of the girls at the gym also brews beer so we do swapsies!
Hi UTMT, glad to see you haven’t disappeared as was recently feared.
Well done on not getting a dog. Can I suggest chickens? Definitely a moneysaver as we were spending less than £10/month on food but getting over 200 eggs, so it doesn’t take long to make back the capital outlay (as long as you don’t buy an Eglu or something). They also produce fertiliser for the veggies. The effort involved is absolutely minimal, and when you go away it’s easy to get somebody to look after them because they don’t need to go into your house and they get free eggs.
My second choice would be guinea pigs. They are smaller than rabbits so need less space and exercise (it’s cruel to keep rabbits in a cage all the time). Unlike hamsters and gerbils they are diurnal so more likely to be awake when the kids are up. Guinea pigs also don’t live as long as rabbits so if you regret your decision it won’t be long before they’re ready to help your children learn about death.
As for your KISS concept, I’m really torn over this one. We’ve just acquired a caravan (for free) which I’m convinced is going to save us money over renting cottages during term time, as well as offering lots of flexibility over when and where we stay. But I can’t deny there’s an ongoing expense and impact on my free time. The same is true of my allotment – it’s both a moneysaver and yet another commitment.
But I wonder if life should really be about avoiding anything new or different. I know Jacob from ERE talks about the benefits of ‘internal complexity’, and perhaps with a caravan and allotment I’m expanding my skills and being self-sufficient enough to help me develop into what he calls a ‘renaissance man’.
What I’d really like to do is start a blog of my own, hopefully one which moves beyond purely financial independence to take in the whole lifestyle and mindset of independent living and thinking. Now that really would be a drain on my time 🙁
David,
My sister has chickens. The biggest issue I see is that allowing them to roam free means they end up destroying your garden/veg patch. We don’t really have the space for a large pen and I think the smaller eglu type hutches seem terribly small for birds that size. Also I have an irrational fear of being bitten by small furry things so I’m not sure I’d get on with guinea pigs either!
The problem I see with caravans is most people end up in a cycle of perpetual upgrading. TVs, awnings, furnishings, storage solutions, all things compact etc etc. An old colleague of mine learnt to hate his caravan. He said he was constantly packing/unpacking/setting up/down every time they used it for a weekend away. Never having had one I can’t really comment beyond this one reference point.
I’m certainly not advocating never trying new things or change. Instead I’m trying to highlight that it’s easy to get drawn into activities that can quickly drain your finances and time much more than you might have considered, particularly if you’ve got an addictive personality like me.
Finally, blogs are a big drain on time (nearly as much as children) so think carefully before doing so!
Hi UTMT!
“Their products are so damned good that once you start using them you’ll never want to stop. You might as well sign up for a subscription to Apple Inc.”
You probably know this, but just in case not — Apple has indeed introduced a subscription style model now for its iPhones. 🙂
http://www.macrumors.com/2015/09/09/apple-iphone-upgrade-program/
The Investor,
Wow, I hadn’t seen that. I should imagine that will p$ss off a few mobile phone companies! I’ve got an old iphone 4 that is soldiering on and on a sim only deal so I don’t think this kind of subscription deal is for me…however it’ll probably turn out well for shareholders though 🙂
We are trying not to get sucked into purchasing more of Apple’s pristine products by deliberately flouting their ecosystem philosophy. While this comment is being typed on a Macbook, we both have Android phones (and like them quite a bit). Our Apple devotee friends wonder why we won’t continue purchasing ALL Apple products (ie, the phenomenon you write about), but we’ll eschew “convenience” for now.
Yes, it certainly is expensive to have a dog–boarding during holidays, vet visits, etc. Of course, as long as we can afford it–and we certainly can–we still think our rescue dog was possibly the best thing we brought into our home. Better than any “purchase” we made. But, yes, everyone should think about whether you can afford those costs before plunging into pet ownership (or child rearing, for that matter).
Great article and enjoyed the subsequent comments discussion about pets and home brewing as well 🙂
In terms of your suggestions to KISS I haven’t bought music in years. What’s the point when you can get practically anything for free legally nowadays?! Weird. Avoiding pets is a good one, but as you say once kids come along I think I am also likely to break on that one once they are the correct age. My 9 year old nephew wants a leopard Gecko, I never even knew such a thing existed! Quite expensive for the initial outlay but much less once you are up and running than cats and dogs that is for certain. And easier to look after! I’ll be interested to see what the little critter gets up to when he gets it that is certain 🙂
I also do the home brewing on the super cheap and “not properly” as I am sure some aficionados would probably think, but hey it tastes good to me and I’m enjoying it so far and saving money. The initial outlay was minimal but if I ever want to get into it more seriously then the option is always there in future.
With you on the baby things having recently started to acquire bits ourselves in preperation for March 2016. We have bought a pram new and will get a cot new, but pretty much everything else barring a few small items of clothing (couldn’t help ourselves!!!) we’ll be looking to get as hand me downs. I find the stuff is used so little it looks brand new anyway doesn’t it.
Cheers!
theFIREstarter
I have a nephew of similar age who is determined to get a pet snake! I also have a jumpy wife that states she’ll never visit the aforementioned nephew ever again if he has a pet snake 🙂
Congratulations and good luck for March. Nothing can prepare you for the whirlwind ahead. The best advice we had was to politely ignore everyone else’s opinions and follow your own instincts. It’s an amazing experience…don’t forget to savor every moment of it no matter how knackered, scared, nervous you are!