Life is all about compromise. In almost everyday situation we come across, we have to trade one item off for another. For example, when I buy cream cheese, I usually go for the lower priced version rather than the much more well known Philadelphia. Why? Because I think the taste is identical and I get to save money at the same time too.
However, if I'm buying that delicious yeast spread for my toast, I always, always, always get the real Marmite. All of the others I've tried, especially in this part of the world, aren't quite the same.
I'm trading off the price of the goods for the taste. Usually I'll go for the cheaper option but in this case, there is no comparison, it has to be the original. I consider this to be a trade-off I am willing to take.
It's a Trade Off
Every single day, we're forced to trade something off against something else. Yes, you can go out for lunch with your co-workers every day but then you wouldn't be saving as much as if you'd brown-bagged your sandwiches before you left in the morning. Of course, you don't want to cut it out completely either since there wouldn't be any fun in that at all. It's a compromise.
It's the same with anything. You can take that expensive holiday abroad and enjoy it for 10-14 days, or you can choose to invest that money and spend 3-6 months there in 20 years time. By that stage in your life, you're probably more financially sound and more importantly you also have more time too (you're not still working in 20 years are you?).
Of course, you never know if you'll still be able to do that in 20 years time but that's not a big worry since you've already decided in your own mind what is important to you now. What is important to me now is my future lifestyle in 7 years time when I can semi-retire. If by then I want to go travelling, eat out every day or buy those large squidgy Marmite jars, then I'll do that - I'll do whatever is important to me then.
Choose Your Way of Life
Your future therefore is determined by the choices you make now. By deciding that your future is the most important thing for you, you should do everything you possibly can to make that turn out for the best.
If you have children, you might decide that they're the most important things to you, so again you should do everything you possibly can to make that turn out for the best too. You may decide the environment is your thing, in which case, give it a high priority in your life.
No matter what you decide, by channeling a lot of your energy into that area of your life, you'll be handsomely rewarded further down the line.
Prioritising for Retirement
As you all know, I have recently decided that my retirement is something which is very important to me and I am channeling a lot of effort into making it happen. Almost everything I do these days is somewhat influenced by my recent decision to both pay off my mortgage and retire from the daily grind by the time I reach my forties.
When I get up in the morning, I have my breakfast at home and wait until I'm in work for my coffee. I head home for lunch and I don't snack in the mornings or afternoons. My tea is usually planned - except when it's not - but I have reserves in the freezer for those times. I exercise plenty and am now biking. My car is about to be put on sale (just two more things to do) and my house is the smallest place I have lived in for almost 10 years.
The interesting point to note is this. Even though I have recently changed almost every aspect of my life - sometimes radically so - nothing seems overbearing. In fact, almost every decision I make now is influenced by my ultimate dream and in a lot of cases makes these decisions easier (it's almost obvious which of the choices I should take).
A Happy Life
And this brings me back to my chosen way of life. Even though my ultimate decision is to retire at 40, it has actually made the rest of my life, as it is now, a much happier and meaningful one. I prioritise time over TV, I choose exercise over going to the pub and I choose the great outdoors on a bike instead of a supermarket car-park in a car.
It just so happens that not only do these decisions make me happier, healthier and fitter, they're also making me wealthier and therefore one step closer to my ultimate goal.
What are you prioritising to get you closer to your goal?
7 comments:
I find myself in the same situation. I am 28 and I have realised not too long ago how important it is to be financially independent. I am on my way knocking off 11000 dollars in debt and I have to say I am doing pretty good actually. Its been 3 months I went shopping , I bag my lunches and involoving myself in physical activities. The amazing thing is that I don't feel like I am sacrificing anything, its actually liberating
@trendy indy:
You're hit the nail on the head - it is very liberating. By not buying into all that "I must have this" crap, you really you're already free of a great many worries and hassles. This feeling can happen way before you reach financial independence too!
Good luck on your quest. Since you've started relatively early, you'll be sweet. Let me know how you get on.
My new goal is to reduce our mortgage term to half. If we can pay it off in 10 years or less that would be really awesome!!!
We are pretty good about buying what we need but at times need to buy unplanned stuff.
I find it harder to stick to a plan having a baby and a husband who does not stop thinking things that require buying!
Andy,
I love your blog because you so often talk about subjects that are close to my heart. David Back (Automatic Millionarie, Finish Rich) talks about the Latte Factor - how much money we waste buying convenience items we really don't need. It's a great place to start when your looking to cut back, and even a great place to revisit when you think you've pared down to the bare minimums. Good luck!! PS You're listed in my blogroll on my web site.
Great post Andy! Thanks for your comment on my blog!
Good stuff! So many folks tie their self-worth directly to what they own. One priority we've made is that we will never have a car payment again!! Our 2 cars have 250K and 205K miles on them and continue to run and run and run! It's just a car and it's purpose is to take me from point A to point B.
@tasha:
Reducing your mortgage term by half sounds awesome, especially if it's still new like yours is. I'm going to do that too once I refix in the next few months.
@Road To:
Thanks for the link and thanks for the book recommendations. I've added those to my list of books to look out for!
@PizzaForADream:
My car has 325km on it so I reckon we're about evens! Anyway, mine is getting sold in the next few weeks. I don't need a car to (as you say) show my self-worth as others do. I've been happy with my car for a long time but the time is ripe to get rid of it. Point A to point B has always been my aim too.
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