Today’s guest post comes from the SavingNinja. I met the Ninja in real life at the London premiere of Playing With FIRE and we had some fun conversation.
The Ninja is aggressive, to say the least:
- 85% savings rate?
- FI targeted before 30?
Holy hell! Very good. but there were scary parts too:
I had set myself the goal of reaching the highest savings rate possible, and I’d get there by any means necessary.
In today’s guest post, the Ninja ponders some of his decisions...
By Any Means Necessary
My idol is Jacob Lund Fisker.
His ‘10-year update’ post was awe-inspiring to say the least. I read his book – Early Retirement Extreme – 3 years ago; since that day, I’ve been trying to transcend into an all-knowing frugal Buddha, just like him.
This obsession has dictated where I’ve chosen to live, where I work, and what I eat. So far, living this lifestyle has allowed me to reach a savings rate of 85% and I hope to reach my FI target of £300k ($396k) before I turn 30 years old.
We in the Financial Independence community are always preaching to save more; we tell others that better experiences, that will make you happier, can be achieved for a lower cost.
That keeping expenses as low as possible is paramount…
But is there a point where it can be taken too far?
My Life so Far
I’ve always had an inclination towards frugality. Growing up poor in the North of England instilled a strong desire to earn and save money, it also deeply rooted the notion of not needing to spend a lot in order to gain happiness.
I knew that you could holiday vacation on the cheap. I knew that these trips could in fact bring you more happiness than luxurious, expensive get-aways.
I learned that you could buy food staples and make delicious meals for a very low cost, often being more nutritious than in-the-packet varieties. And I definitely understood that brandless clothes were just as good if not better than over-priced, branded ones.
I always kept my childhood lessons stored up in part of my brain, but I temporarily lost access to them when I started my first ‘grown-up’ job after University. I had a good chunk of money to be spent at the end of every month for the first time ever.
I got into the habit of counting how many PlayStations I could buy with all of my excess disposable income every month and I used that metric to calculate how wealthy I was.
Before long I’d bought a sports car via finance, stupidly only calculating the monthly cost. For the next two years, I continued to ratchet up my financing agreements and spending into oblivion. I’d squandered all of my pay and was actually in negative net worth due to the debt.
It was at this point in my life when a friend at work sent me Jacob’s book. My eyes grew wide as I read the veritable pages and learned of all of my wrongdoings. I had been going through life in a completely wrong way. My preconceived thoughts of taking on as much debt as I could get and buying as big a home as possible soon dissipated; dreams of thrift and financial independence started to materialise.
All of my misplaced frugal thoughts came flooding back to me with a vengeance…
I’d… LOST TWO YEARS!
Segueing onto a Different Journey
Over the course of two years, after reading Jacob’s book, I changed my life beyond recognition. I had set myself the goal of reaching the highest savings rate possible, and I’d get there by any means necessary.
I bought a home in the cheapest area that I could find; I’d moved jobs multiple times and ended up working at one of the richest FinTech’s in the UK; I’d given myself a 3-hour round trip commute; I’d also picked up a number of extra side-hustles like Matched Betting and Merch by Amazon effectively upping my work week to over 70 hours.
I was going all in! I had basically cut ALL of the non-essential spending out of my life and upped my workload to maximum burn-out phase. That’s when I created SavingNinja and began tracking my progress each month.
My mandatory annual expenses dropped – and have remained – at £5,700. This covers my mortgage, living, and food. It costs me an extra £2,400 for my London commute, and I try to spend at least £2,700 per year on holidays and ‘luxury items,’ but I struggle to do so.
My spending has pretty much bottomed out to the lowest that it can physically go. This has no doubt been great for my finances; I was able to clear my debt and reach the milestone of £100k within my first 2 years of hard saving, I should feel on top of the world…but I don’t.
An uncanny feeling which has been with me since the beginning of my journey has begun to grow too strong for me to ignore. My perceived well-rounded mental health has started to show it’s true colors through the cracks in my psyche.
Has my neuroticism got the better of me?
My Never Ending Quest for Success
Growing up I played video games a lot, especially MMOs like World of Warcraft. I was the type of player that was known as a ‘guild hopper.’
In order to gain entry into a guild of a certain caliber, you’d need to meet a minimum threshold of progress to even be considered. The fastest way to get that progress was to join a lesser guild who hadn’t advanced as far and progress with them.
Instead of the normal route of joining a guild and having fun whilst progressing and learning together. I saw each guild as a stepping stone to the next best thing; I’d get my progress and then move on. Consistently doing this landed me in one of the top 10 European raiding guilds at the time, I was raiding in the so-called ‘premier-league’ of World of Warcraft.
All of my gaming lives were lived in a similar fashion. I was like a masochist with the never ending thirst for PROGRESS! I damn needed it; I couldn’t be happy unless I was at the top…
Every game became an addiction.
This is the same mentality that I’ve bought with me into the real world. Forsaking current happiness for future results in any way possible. The FIRE movement was damn near perfect for me, but maybe that’s why it’s also my kryptonite?
I don’t want my life to be one never ending game of World of Warcraft where I farm gold for 12 hours a day and then quit when I’m the richest person in the game.
Bad Value Makes me Sick
I’ve written before about how I’m allergic to spending money. Being part of the FIRE movement for so long, and feeling the dread of missing out on previous years of saving has broken something inside of me.
Now whenever I’m faced with the need to buy something that is of bad value, I feel physically sick. It doesn’t matter how much I have to spend, even if it’s just a £4 pint of beer in the pub; my breathing will quicken, I’ll become flustered, and I’ll begin to feel nauseous due to the possibility of wasting that money when I could buy the same beer for so much cheaper at the shops.
This feeling accompanies most things that you can think of:
Going out for a meal? Forget about it.
Buying a bunch of flowers for a loved one? Unimaginable!
Buying a birthday card for Grandma? What a waste of money.
If it’s going to affect my FI target, it gets flung out and the Horrible Feeling gets ushered in. Even if there’s simply the possibility of bad value, I tend to forego the purchase simply from the fear of the Horrible Feeling.
It’s not a Good Thing!
This is actually extremely bad.
It affects my life negatively in so many ways.
Why do I need to fret and feel shitty over figuratively losing a tiny little droplet from my reservoir of savings?
If I can increase the time it takes me to get to financial independence by 0.01% in exchange for a little bit of happiness, however trivial, right now; shouldn’t I greedily gobble up that opportunity? The whole point of the FIRE movement is to be happy…right?
Sometimes we need to spend on bad-value, there simply are no other alternatives. Or sometimes the experience is worth the increased cost. If I can’t accept these opportunities without retching at the mere thought of them, there’s something seriously wrong with me and it needs to be fixed quickly.
The Pursuit of Mindfulness and Balance
I went to a FI meet up last year and I got talking to the founder of the Frugal and Freegan Facebook group about my malaise. He said something that has stuck with me ever since:
Frugal habits are hard to break. If you’ve been extremely frugal for many years, you won’t be able to stop no matter how much you have saved.
Doggedly obsessing over anything in particular is surely not healthy, no matter how much I want to be like Jacob Lund Fisker.
I still want to focus on minimalism and saving, but I shouldn’t have to feel a wretched twist in my gut when – and it’s an inevitable when – I need to spend.
I want to pursue my FIRE dreams with mindfulness and balance. I want to reach my goals peacefully with the intelligence and character of a scholar.
I don’t want to reach my goals as a raggedly old miser with no friends, who’s devoid of love and happiness in his heart…even if that means I reach my goals years later.
So, this year, I’m actively trying to lower my savings rate. I’m going to force myself to spend money until I don’t feel bad about it anymore.
I’m going to pursue…happiness-inflation.
I reached out to Carl to talk about this issue as it seems there is no one discussing it. I LOVE…and I mean really love the Financial Independence community. It’s my life and I care about the movements’ ideologies deeply, but surely there’s a point where you’re probably obsessing too much? A diminishing returns of saving?
We all need to look within ourselves and see if we do have a problem. There’s so much positive reinforcement for saving that it can sometimes take a really long time to realise that you might be pushing too hard – I know I struggled with this; It’s almost like having an existential crisis.
So, I would like to shout out into the blogosphere; Does anyone else feel this way?… How did you combat it?… Or are you still struggling?
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Good read, Saving Ninja. I definitely think you can afford to lower your savings rate by 5-10% in order to enjoy your money a little more, without affecting your ability to retire early (or make work optional, etc).
I think it might be helpful to make an excel spreadsheet and work out how increasing your expenditure would increase your time to FI. I can’t imagine that spending an extra £2000 each year, when you already save so much, would add more than a year or two.
I understand though, that this is about more than just increasing your expenses. It sounds like you have deeply ingrained this habit, so it may take time to reverse. I think it will ultimately be worth it though. It’s easy to forget, but life is a journey, not a destination!
Dr FIRE recently posted…Building Wealth in my 20s: Successes and Failures
Thanks Dr.
I came to the same conclusion; that increasing by 5-10%, or even more, wouldn’t make that much of a dent. I just need to make sure I’m recognising when spending is worth it. And hopefully, in time, the repulsion towards ‘bad value’ will wane. I think having crossed the £100k barrier it’s already started to get a little easier.
The best way to combat that isn’t by spending on yourself, though that will also help. The best way is to give away a significant portion of your income, like 10-15 % of your gross income every year. Then you’ll learn generosity, earn more, have more friends and be less neurotic. I’ve given away a large part of my net worth along the journey, and still have way more than enough because of it.
Great comment! I wholeheartedly agree. The more I obsess about money and saving the more I give away.
Money doesn’t mean anything and it is a horrible motivator. It is just a tool. A means to an end. Giving it away helps out this into perspective when I forget this and care too much.
I’d love to try this Steve. Being honest, this would be extremely hard for me. Due to my aversion to spending money, giving it away (no matter how good the cause) is even harder. This is definitely something I need to work on; I’d like to try and start with my parents (68, miserable, and still working due to no savings).
I read on your blog, that you received money from your Dad when you went to Uni…so, why is it difficult for you to help your mum and dad out? It appears, they helped you out when you needed help (obviously, they recognized you needed help and they gave it); so, why haven’t you recognized that they may need a little help now?
I have 2 daughters and I always remind them, it’s important to find who they are, money comes and goes and never to chase money.
BTW-I was born in Walsall, England and moved to US when I was 21; retired at 55 and my parents live with me, they are 91/92.
I’m not trying to beat you up, but just for you to slow down a little and think about who you want to be? Just like having a goal to retire early, you have to have a goal who would like to be…Best of Luck😎
That was an article written by my wife, they helped her out as her parents are wealthy.
I’m working on getting there 🙂 Bit by bit! Thanks for your insights.
My bad🤗…I owe you a Pint!
Definitely! Give to your parents. I give mine a few hundred each special event. They won’t be around forever and the older they get the harder it is for them to enjoy it. I know as my parents are 70s and 80. Great post btw!! Really well written. My parents find it hard to spend. I got a chauffeured Rolls Royce ride for him once and all he kept asking the ehole journey is how much I spent on it. I took my mum to Luxembourg last year and she found it very hard to deal with the prices even though I was paying. I don’t always find it easy to spend but much easier than before. I do hate paying 4 quid a pint though, with you on that one! 🙂
If donating money is difficult at first, try donating your time. When you get to know how good it feels to help people, it will be easier to share your wealth as well. This may help you overcome the Horrible Feeling.
I felt this way for probably the first two years of my FI journey. Then, I found a breast lump at age 34. Through the following weeks of biopsies, surgery, tests, and oh so much waiting, I thought a lot. “What if I have cancer and die? Does me freaking out about spending an extra $4 or $40 or even $400 mean anything if I never live to see FI, and I was miserable for the last few years of my life freaking out about spending money on possibly curing my cancer?”
My biopsies came back negative, but the perspective shift stayed. I want to enjoy life with my husband and teenage stepson, and sometimes that means spending some extra money. Yes, I still cringe a little about various superfluous expenses, but I know they aren’t all (as you put it) bad value. Those superfluous expenses add splashes of good value in smiles, having fun, laughter, memories, and enjoyment. Extra expenses may not add to the net worth tally, but they certainly can contribute to net happiness.
I also realized that at the end of the day, full FIRE was actually someone else’s goal that I had adopted. I love goals so much, I didn’t stop to think if that was a goal that mattered to me. After looking at lots of options and talking quite a bit, my husband and I figured out that Coast/Barista FI is a better fit for us.
It also doesn’t hurt that our net worth is up over $160k since the biopsy about 18 months ago, and I’m not going to bother calculating what it would have been if I’d pinched pennies since then. I’m going to celebrate that our net worth is up over $160k in 18 months. Like, seriously, WHO DOES THAT?!? We did! So pop open up that $1 bottle of seltzer! All in all, I’m healthier and happier with extra space for enjoying the little things.
What a powerful message Kristen, thank you; it’s definitely made me think.
I’ve actually made a decision recently that I think will improve my wife and my own happiness dramatically, as well as lowering our saving power by a fair bit. I’m hoping that on the flip side, I’ll be as happy with this decision as you are 🙂
I’m glad that everything was OK with your health!
I find it difficult to read any FIRE article from people lucky enough to live in a country where the cost of health care isn’t a personal concern.
This is in no way a criticism of the post. If the cost for flowers for a friend made you sick, how about $300 for a blood test, or thousands for an MRI, just for a possible diagnosis before any treatment starts? You’d have to also see an expensive psychiatrist when that happens 🙂
A wrecked knee can literally bankrupt a person in the US. Never mind a brain tumor, cancer or other serious or chronic medical condition. And this is for people that pay $1200/month (or more) for insurance that doesn’t cover the first $5000 out of pocket!
That’s a very valid point YYZ. On the flip side, working exactly the same job in exactly the same type of company in the US would see me earning 3 times as much as I currently do in the UK – and I’d pay less tax!
I actually pay upwards of £800 per month in tax simply for national insurance (mainly health care). Even though we have ‘free health care’ to Americans, it’s funded by people with high salaries via income tax 🙂
I’m mostly recovered from this same problem. For me it was about survival for over a decade, so when things were much better, I still struggled to see that they were. I was very fortunate in that my life partner was someone who believes in spending when you need to and when you want to, and was both willing to learn frugality from me but also pressed me to learn to embrace prioritizing ourselves over our money. There is a strong need for balance in your approach if you literally feel ill at the thought of spending a negligible amount based on a survival value system, and you can definitely work on it.
I would suggest assigning value to things like hobbies and interests that are solely there for you to enjoy and not make money off of. My blogging for me and not for the income is one way I combat that creeping desperate need to have everything make money and nothing lose money. Reading and comics are another. I’m sure there’s something you enjoy that can be just a cost and not a means to profit.
Hey Revanche,
I love that you found the perfect Yin and Yang in your relationship 🙂
I’ve blogged recently about how my passion (and my wife’s) is Snowboarding. Quite an expensive hobby! I think this year we’ll ‘force’ ourselves to buy our own snowboards!
Thank you for your motivating words.
Yes I think a presents for friends budget is the way forward (distinct from a charity budget which is also a good idea, see The life you can save).
I’ve always been much less frugal to my friends than myself, for example when I was a poor student in an expensive bar, I was genuinely happy to get my friend a vodka and x, while I stuck to lemonade for myself. If you buy a round in your ‘presents for friends’ budget then they will get the next round, free drinks! If you treat your friends to tickets to an event, they will get the food. Free food! Maybe check out two for one offers on GroupOn, then buy, again, presents for friends, and you get to join them for free.
Maybe charity auctions? Basically you buy fun treats, but its for charity. Plus you will end up doing random things you might not have planned to do. I got a Ghost walk in Oxford and kayaking in canals (not sure what is happening with those re Covid).
And partly I just accept that if I buy a fancy notebook, I won’t write in it because it’s too nice and needs to be saved and so I stick to scraps of paper. I bought one fancy notebook (for £4 in Morrisons) purely to keep it on my shelf for the aesthetics, with no pressure to use it.
Maybe some counselling or coaching sessions could help you think through what you want and tease out any unhelpful scripts you may be following and give you some exercises to work through (coaching students are very good value).
If you feel your current relationship with money is unhealthy at least it is a big improvement over your previous relationship. I know I’d rather be miserable with 100k in the bank, than miserable with no money and huge debts. And realising your patterns is a great step forwards. Good luck in the work of moving forwards towards the balance and happiness you want.
Thanks for the advice Chris!
Counseling isn’t as big a thing as it is in the US over on this side of the pond. I think it should be! I’ve recently got Headspace (I had a huge group discount!) and using that has helped me tremendously.
You’re probably right about the £100k in the bank part. I think having crossed that milestone I’m definitely finding it easier to try and inflate my happiness a little bit; with no savings, I absolutely wouldn’t have been able to. I guess I’m just too much of a worrier and over-thinker!
Excellent write-up SN, thanks for sharing and great to read more about how FIRE has changed your life (both positively and negatively).
I read Jacob’s website in the early days but knowing my own nature (and that I was a lot older when I discovered FIRE) meant that I knew his way was way too extreme for me so I went for balance – I will splash the cash on certain things but not on other things. Most of my expenses are social and as you pointed out, who wants to be a raggedly old miser with no friends?
I know for a fact that if I wanted to, even before lockdown, I could quite consistently have a savings rate of 50%. I tried doing ‘extreme frugal’ one month but I was miserable as that’s not how I want to live my life.
I’d love to reach my goal quicker but I’m happy with the pace I’m going at so there’s less pressure on me to max out all the numbers in the quickest possible time.
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Inspiring words Weenie 🙂
I think I’ve been heading down the Scrooge path for a while, I might have caught myself just in time, haha. I’m sure Manchester has a lot to do with my frugal habits! Now I’m down south, I have to act like a southerner at least a little 😉
You seem to have a natural tendency to fixate on goals. Use this to your advantage.
Create a balanced scorecard for yourself. You want FI AND some other things. “And” is one of the most important words.
“Or” is a dangerous word — “you’re either with us or against us.” When you hear the “or” pitch from yourself or from someone else, you are being steered and used for someone else’s goal.
For me (age: late fifties and FI), my balanced scorecard includes being a good partner and parent, staying active and fit, making progress on a couple of hobbies.
Then, add some measures to these goals: hours spent with your family and friends, improve your listening skills, hours mentoring others, expand your circle of friends, improve your skills as a musician or artist, or whatever suits you.
Wow, you’re completely right; I hadn’t thought about my personality like this before. I have to gamify my life in ways other than money!
I wish there was some decent goal setting software that monitored your well being and finances. I guess I’ll have to make a spreadsheet for it 🙂
Thanks for the inspiration!
Hey Ninja. I found myself facing some of these questions while also still having moments of mindless spending. I added a tab to my normal tracking spreadsheet for my value of spending. Anything I spend money on that isn’t part of what I’ve identified as essentials gets tracked on this spreadsheet and gets assigned a value. I find I struggle most with obligatory spending so I track categories of “Shouldn’t have”, “Obligatory”, “relational”, “YES!” etc. That pint in the pub may fall under shouldn’t have or obligatory at times and I know those need to be excluded. However, when it falls under “relational” I know I valued that time with whoever I was with and I spent money on me/us because I truly wanted to and felt good about it. Those at the times I don’t think twice about. My goal at this point is to get to 90% value based spending and eliminate the conveniences of “shouldn’t have” and the mental blocks of “obligatory.” As I’m sure you can imagine, this tracking has not only improved my finances, but it’s helped me get much better at appreciating my true relationship building moments without having money on the mind and it’s also helping me slowing get beyond the feelings of obligation. I will say sometimes I have to split it too – that beer in the pub may be pure relational, but the fries often fall in that “shouldn’t have” 🙂 Good luck!
Hey Tina, that’s a very good method to track value 🙂 You’re right that the value added to a drink in the pub should be for relations rather than drinking the alcohol!
I think for me an additional thing that I need to watch out for is simply being over-analytical, e.g. do I really need to even track something to see if it brings value if the expense is so small? Should I put myself through the extra effort and potential worry? Maybe that’s where my Horrible Feeling comes from?
You touched on an important point that actually quite a few people have written about — the balance between living one’s life now and saving for your future FIRE goal. The OG (aside from Mr. Fisker of course) Mr. Money Mustache talked about it quite a bit – frugality is not about spending as little as possible. That’s being cheap, and is another thing entirely. It’s about maximizing your happiness per dollar. Frugality is cutting out all those wasteful parts of our lives that don’t bring us happiness.
The beer was a great example. I will happily spend $4-5 on a beer that means a great conversation with a friend. I will not drop $40-50 at the bar on a weekend just because I feel it’s the weekend and society tells me I need to be out.
FIRE was never, or at least it shouldn’t be, about delayed gratification. It’s similar to dieting. You need to adopt a lifestyle you can live not just until you hit your goal, but in perpetuity.
So, it’s very good that you recognized this – balance is a really important concept in FIRE and it’s what keeps us sane.
Thanks for your comment – you’re right! It shouldn’t be about delayed gratification; even though sometimes it’s hard not to fall into that trap when everyone is spouting SAVE AS MUCH AS YOU CAN! But dig a little deeper and you’ll see the message say NO, save as much as you can by still spending smarter NOT less!
Although I think my issues arise when I think too much like the above. Why should I EVER eat out at a restaurant when I know that I can cook a better and cheaper meal at home? Why should I EVER pay for an attraction when I can go on a perfectly enjoyable free walk? Sure this is good thinking in general, but I want to be able to spend on these things if I choose to, or ever once in a while, without feeling a bit shitty; that’s what I think I need to work on; I’ve nailed the frugal/spend smarter side, probably too much 😀
Yeah for sure man – it’s all about balance. Balance is much harder to find than the extremes. It’s something we all work on, for sure.
Why should one eat out at a restaurant? That’s a question each person must answer for themselves. For some it’s almost never. I have friends that FIRE’d this year and they go to a restaurant maybe once per year. They just don’t like it. For me, I don’t mind a restaurant meal once in a while, usually for socialization purposes. I also don’t mind buying an extra coffee if it means a couple of hours socializing with a friend. That’s a lot different than having a two $5-latte per day habit.
It’s a balance i struggle with too, although the frugal side of the balance tends to come more naturally to me these days. I did splurge on a new guitar I’ve wanted for some time. Usually windfalls go right into my savings, but this time I bought my new telecaster. Balance in all things, even balance. Stay strong brother.
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Definitely! Give to your parents. I give mine a few hundred each special event. They won’t be around forever and the older they get the harder it is for them to enjoy it. I know as my parents are 70s and 80. Great post btw!! Really well written. My parents find it hard to spend. I got a chauffeured Rolls Royce ride for him once and all he kept asking the ehole journey is how much I spent on it. I took my mum to Luxembourg last year and she found it very hard to deal with the prices even though I was paying. I don’t always find it easy to spend but much easier than before. I do hate paying 4 quid a pint though, with you on that one! 🙂
I think you’ve hit it on the head – the risk of making life about saving instead of, well…life!
Of course, for *most* people this concern doesn’t really apply and it makes sense to emphatically focus on saving just to get things going. On the other hand, some can take it too far.
I was just answering a similar question about whether “we” should be careful not to save too much. I think the answer applies here, too – though I don’t direct this “at” you Ninja:
–
FIRE is a marathon, not a sprint.
Let’s pretend you genuinely maxed your income and minimized your spending. You worked 16h/day and spent next to nothing just to get through it because you hate your job and want to be done with it ASAP.
So you reach your FIRE number, but then what? Presumably, you’ve spent years doing nothing, building no hobbies, relationships, or pursuits for your retirement era. You’ve done nothing but save money and forgot to build a life.
Moderation.
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Hi there! Thanks so much for this post, it was really interesting and made me think about my own goals / motivations.
I think I get so focused on the end game that I forget to smell the flowers.