How to Get Richer Without Making More Money
Myself and my wife were chatting about our upcoming trip over breakfast…
“You’re such a miser,” she says to me.
“EXCUSE ME!” I say, feeling offended.
“You’re a miser”, she says calmly.
“What the hell? Don’t say that, that’s nasty!” I rebuke.
“No it’s not, do you even know what it is?”
“No, but it sounds nasty, apologise right now!”
“Go look it up” she responds.
I walk off in a rage. Annoyed that a simple conversation resulted in my wife insulting me with some word I don’t even understand. How dare she! I think to myself. It certainly doesn’t sound good. I open my laptop and search for the word.
mi·ser (mi — zər) n.
1. One who lives very meagerly in order to hoard money.
She’s right. I walk back to her and begrudgingly accept that the word is an accurate description of what I was saying.
“Ok fair enough, ” I say with my tail firmly between my legs. “It still didn’t sound very nice but I accept, I probably am a miser”.
She smiles at me slyly, knowing firmly that she is right.
The conversation we were having was about what to do about dinner on our holiday. We had a camping trip planned and I had made lunch for us to take so that we could eat when we got there without having to buy anything. My wife proposed that we go out for dinner the evening we arrived. Me, being my usual self, explained how I thought it might be better if we didn’t. Despite it being our holiday I still wanted to remain financially disciplined. I suggested that instead of going to a restaurant, I could cook a couple of pizzas we had at home and take them with us. It would be just like getting takeaway pizza, but cheaper. There was a downside though. Given that we were camping, we had no reasonable way to heat up the pizza. It would be cold by the time dinner came around. In my head, that was a small price to pay for the money saved.
What is wrong with me? I think to myself on reflection.
I accept the miser label and realise that on this occasion, I had gone too far on my desire to not spend. I give in to my wife.
“Where do you want to go for dinner?”
This story illustrates a deep value I hold.
A value that has enabled me to become financially free.
A value that is both a blessing and a curse.
A value that is so entrenched in my psyche that I struggle to breach it under any circumstances.
This value is;
In order to build wealth, you have to dislike spending.
It’s not flashy or glamorous, but if you want more money, you just have to stop buying so much crap.
That new handbag? Forget it!
That latest phone? What’s wrong with your old one?
That new car? Unnecessary!
It’s not enough to simply try not to spend. You’ve got to train your brain to not want to spend. You’ve got to dislike spending as much as you dislike cleaning your dog shit off your shoes. You’ve got to eliminate your desire for material possessions. If you constantly give in to your desire to spend, you will never successfully build up wealth and keep it long-term.
I read questions posted online regularly like;
“If you won $1,000,000, what would you do?”
Absolutely fucking nothing! If your answer to this question involves cars, yachts, watches, holidays, houses, etc, then you’ll never be wealthy. The money would be gone in an instant.
If you want to be rich so you can buy yourself whatever you like, then that rich status will be short-lived.
Financial freedom comes quickly and effortlessly when you don’t want to spend any money.
Does this mean not spending ever?
There’s a balance. A sweet spot where you spend just enough on the things you need to live your life well. You spend enough such that you have everything you need in life, but no more. The trick is to spend money on the things that genuinely bring you pleasure in life, and not buy anything that does not.
Financial freedom does not mean being able to buy anything your heart desires, it’s about having the freedom to choose how you spend the time in your life.
How can you train yourself to not want to spend?
It requires a shift in mindset.
In life we encounter temptation everywhere we go. Advertising encourages us to buy more, more, more everywhere we go. It invades everything in our lives, constantly reminding us how easy it is to exchange our money for products and services. Not succumbing to this temptation every single day is incredibly difficult. We are weak-willed human beings and resisting these urges is going against our primal selves.
To be successful at losing weight, you’ve got to dislike eating foods that are bad for you. Spending is similar, in that you need to rewire your brain to dislike spending money.
This is hard, but there are a few things you can do;
1. A Spending Detox
One thing I like to do occasionally is, not spend any money for a period of time, say 24 hours. Sounds pretty easy right? Well, it should be, but in reality, it’s pretty hard. The goal is to not spend any money at all, for 24 hours. This means no purchases in any shop or online for an entire day.
If you find you’re capable of doing this, try it on a more regular basis, or on a day you find more challenging. Saturday for me tends to be a particularly challenging day as I usually buy something for my children.
You can also try detoxing for longer periods of time. Maybe even try for a whole week. Plan your week our advance, buy all the food you need, make sure there’s enough fuel in your car, get prepared and set yourself a target of not spending any money in person or online for an entire week.
From my experience, this is incredibly difficult to achieve but the process of trying is extremely eye-opening to how much we actually spend in our day-to-day lives.
The goal of this exercise is to break the habit of constant spending. You realise that you can live a perfectly normal healthy life, not spending any money for large periods of time. This exercise isn’t sustainable for huge periods of time, but in small bursts, it’s great to learn about yourself and your relationship with money.
2. Don’t keep up with the Jones’
One of the ways we’re encouraged to spend money is through our social circles. We want to prove our status by showing our friends and family that we too can buy all the things that everyone has.
In his classic book, The Millionaire Next Door, Thomas J. Stanley talks about this at length. He says;
“Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Then, we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods.”
The lesson here is that truly wealthy people don’t fall into the trap of advertising their wealthy status to the world. You can actually take pride in not succumbing to social pressure. It’s like a fun game, to be the one who doesn’t spend. The odd one out, the intruder in a foreign land.
- Oh, you have the latest iPhone? Nice! Look at my piece of shit phone!”
- “You like my jeans? I’ve had these since I was 18 years old!”
- “You’re all going out for steak? Thanks for the invite, but no thanks”
This is easier said than done. We gain positive feelings from our social standing. We feel that we are somehow less likable if we don’t spend as our friends do. But try it next time someone tries to impress you with their new purchase and see how it goes.
3. Reward yourself
Positive reinforcement is the psychological concept of reinforcing behaviour by rewarding it. It has been shown by countless studies to be an effective way to drive the right behaviour from individuals. What’s great is that we can use this powerful technique on ourselves.
It goes like this.
First, think about what financial goal you want to achieve. Then, think about a suitable reward for achieving that goal. Some examples;
- “When I save X, I will reward myself with a trip to the beach”
- “If I don’t buy any clothes for a month, I will reward myself with dinner out”
- “If I don’t eat out for a month, I will reward myself with a spa day”
You have to be honest with yourself and only take the reward when you truly achieve your goals. But executed well this can have a huge impact. Having something to look forward to can be a really powerful way to encourage discipline.
Being financially free is not about living in a cave, eating fish you’ve caught that morning, making your own clothes from moss you’ve found in the woods. It’s about having the freedom to choose what you do, every single day, without the worry of money.
We know from multiple studies about wealth that coming into a lot of money does not necessarily lead to a happier life. I firmly believe that a life of spending less leads to a more wealthy and happier life.
I’ve achieved financial freedom, not by achieving super millionaire status, but by learning how not to spend. This has lead to a simple life, where I appreciate that which I have, and don’t desire that which I do not.
Spend less, be rich, live happy.