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!
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