Here’s one reason why I love English so much: its extensive and highly granular vocabulary. Through its Germanic roots, Saxon influences and heavy French borrowing, the English language offers its users a wider range of words and expressions than most other speakers have at their disposal. Last weekend that fact hit me again like a ton of bricks during a conversation on personal finance with an American.
Without going into further detail, the girl I was talking to made the obvious distinction between “anything” and “everything”, more specifically in the context of affording something you want. Even though the two concepts also exist in Dutch, my mother tongue, they can’t be used in the same way or even sentence – and that’s a pity.
Why, you ask?
Because it denotes a clear distinction in your view on personal finance and because it harkens back to the basic principle behind enjoying a frugal lifestyle. Indeed, I can afford anything I want in life, but I can’t have everything. The anything vs. everything distinction lies at the core of frugality and by extension financial independence.
Let’s take a look at what I mean by that.
At the moment I have a little under €70,000 in the bank, which goes a long way to affording anything I want. Barring some exceptions, like expensive cars or real estate for example, I’m able to purchase whatever my little heart desires: expensive tech, top of the range road bikes, video games – the whole lot.
Here’s what I would love to own at the moment:
- DJI Inspire 1 (€3,500)
- 55″ 4K television (€2,000)
- Marantz SR7009, including B&W speakers (€5,000)
- DSLR and Sony RX100 Mark IV (€2,500)
- GoPro (€500)
- Android Wear Smart watch (€200)
- A whole bunch of Super Nintendo games (€10,000)
- Trek Madone 9.9 (€12,000)
The list goes on and on. Really, I could continue adding things that I would love to own or play around with until my piggy bank’s stomache is all empty. And that’s exactly where the problem lies.
I can have any one or even two of the things on the list above, but I can’t have them all. Yes, it would be great to fly around a bad ass Inspire 1 drone – because, let’s face it, it’s an awesome piece of equipment – but it would be equally great to play around with a GoPro. However, even though it would seem the two aren’t mutually exclusive, they really are.
If you don’t prioritize your spending, especially the non-essential kind, you’ll quickly realize that you do indeed get to enjoy everything you want, but that you’re also starting to live paycheck to paycheck. As you can see, the difference between affording anything and everything could quickly turn into a slippery slope towards financial ruin.
Now, don’t get me wrong. I’m not advocating you forgo all luxury spending, but rather you should ask yourself “is a drone worth it?” In a previous post, I’ve referred to this very question as maximising your happiness. Besides, splurging on things you really enjoy or that add a lot to your lifestyle isn’t a bad thing. I do it too from time to time, like when I bought a GTX 970 graphics card for my PC.
However, even though I wrote that you shouldn’t feel bad when you spend a little cash on things that make you really happy, don’t overdo it. It’s not because you’ve had a great savings streaks the previous months that you should effectively cut your efforts in half by rewarding yourself the next month.
And if you really can’t help yourself, make sure there’s a financial upside to spending a ton of money on luxury items. For example, I managed to bring down the cost of my road bike, one of my more expensive hobbies, by applying for a cycling renumeration at work. As a result, I effectively spent money to make more money in the future.
Where do you draw the line between anything and everything? Do you feel like you can afford anything you want?
You’ve touched one of the most important points in the quest to financial independence; striking a good balance between happiness, fun and saving. I’ve been doing well so far, on a 30-40% savings rate, which still allows me some luxuries and plenty of money to have fun. I think that’s a good balance for me, so as I gain promotion sand begin to earn more, my saving rate should also rise significantly.
I totally understand why you needed (or wanted) a GTX 970 – the amount of joy that you’ll get from it is way worth its price tag. I myself bought a GTX 780 about a year ago, and it’s been great so far (loving the Witcher 3 right now…).
Keep writing great posts, man!
Financial independence is all about maximizing both happiness and saving, like you said. I’m glad to hear that you seem to have found the perfect balance between a luxurious lifestyle and saving about 40% on average – not many people can say the same!
Over time you should see your savings rate grow, not only because of the promotions, but also because your dividends will start to become a significant part of your monthly income. Your dividend payments remain relatively small still, but you’ll be surprised how quickly they jump. Just look at my numbers since September last year and you’ll see what I mean.
The two GTX970s weren’t so much a need, but definitely a want I couldn’t pass up on. I use them all the time (although a little less these days because I’m more outside), so they’re definitely worth the money. I can imagine you’re also enjoying your GTX 780 to the fullest, especially with the newest Witcher! I’m really looking forward to playing it, but I’m waiting for the first big sale… Still have so many other games to play.
Just kidding. But you should check out Paula at AffordAnything.com . Her mantra is “You can afford anything, just not everything.”
Funny, I got a drone last year. I couldn’t fly it with any competence, so I returned it to Amazon. I hope you have better skill than I did.
Ha, it seemed I unwillingly plagiarized Paula! Hadn’t bumped into her website yet, so thank you for pointing it out. Had a blast reading through it. She’s the living embodiment of what many people wish to acheive through financial independence.
Too bad you didn’t get along with the drone too well! I believe their awesome pieces of kit, but I just can’t justify the cost at the moment. Even a much cheaper model would be nothing more than a toy at this point, so I’d rather save and invest that money.
It’s important to have a balance. You can’t be extremely frugal for a long time because you’ll burn out. You can’t be spending money like you have a billion dollar for a long time because you’ll run out of money. Life is about having a balance. 🙂
Right on, Tawcan!
Extremes are never good, so it’s important to find a nice balance between things that are important for you.
And here I thought you’d be writing a post about Paula Pant’s blog, Afford Anything. (http://affordanything.com/blog/) It’s worth a look for a different perspective on financial independence, and reinforces what you shared in this blog post.
Keep up the great work!
Eric pointed out Paula’s blog too! Quite a coincidence since I never read her blog before, but also really awesome to see that different people come up with the same ideas.
Thank you for your kind words!
Personally, all I want to afford is my time. That’s the real anything and everything as it affords you the ability to do whatever you want on your own terms. While I don’t have that fancy car nor live in a house I feel that I have the most control over my time as I work for myself which gives me flexibility to do other things.
Just like you, I feel that time is by far the most important “thing” I’d love to own. Being able to do whatever your want whenever you want must be the best feeling in the world, and I can’t wait to achieve financial indepdence to make it happen. Glad to hear you feel the same way!
I’m with Keith. The freedom to pursue whatever I want on my own terms would be ideal. I could deploy my creativity freely at the time and place and in the direction that needs it most. My desk is overflowing with ideas and wants, but my time is so limited. I can feel good thoughts and aspirations shriveling away. And yet, I’m in this game to hopefully alter the course of my future so that I can water some of these ideas now and then. And I suppose, on some level, we all are.
Your comment shows you possess an awesome mindset! If only more people freed up time to be creative and actively pursue their dreams instead of sitting behind the television or an office desk doing stuff they don’t really care about all day. I sincerely hope you manage to reach a point at which you can pursue whatever you want on your own terms. Good luck!
Thank you for dropping by and taking the time to leave a comment.
Lovely post. I think I agree with you and Keith, in that I want to be able to afford my own time, and my husband’s too! Or should I say, as a family really, that we can afford our own time. It’s very mustachian isn’t it?!
Thank you for sharing your thoughts on this, and as always, I am ever impressed with your command of idiomatic English and American language constructions!
Owning your own time and not having to worry about the financial consequences is the reason why we’re all in the financial independence game, so no surprise that you guys want to afford your own time too – and you’re doing a great job making it happen. It might take us a while, but I’m sure we’ll be enjoying the fruits of our frugal lifestyle and investing mindset in a short couple of years already.
Ha, having a lot of friends abroad and skulking about on the internet for years go a long way in getting good at English. Of course, the bachelor’s degree doesn’t hurt either! 🙂
€10,000 for Super Nintendo games?!?! Are there a few crazy-rare ones in that list? My brother has a Super Nintendo and a bunch of games he bought a few years back for $20.
Really good post. I really need to come over here more often.
Even better you could download the SNES emulator and any game you want for free.
That’s what I do for games that were never released in Europe or that are too expensive to acquire at this point in time. I do prefer playing on the actual SNES though – something about the feeling and nostalgia.
Since I’m a collector I one day hope to own all European Super Nintendo games. I’ve got some crazy expensive ones out of the way already (long live yard sales), but there are quite a lot left. Besides, retro games are way more expensive this side of the Atlantic because of the localised versions and smaller markets. I collect Belgian-Dutch games, for example, which aren’t all too common.
If you ever run into a bunch of Super Nintendo games that were only ever released in the US, be sure to send them over! 😉
Thank you for the kind words, glad to see you’re still being your entrepreneurial self.
The key to financial independence is to want less. Like you, I have a nice sum of cash in the bank and investments. I personally get bored with ‘stuff’, so I don’t have a desire to have much of anything that doesn’t provide great use. I need a computer, but just one that is mobile and fast enough. I need a way to call people, but I don’t need a fancy phone. I would take books and movies from the library any day over video games. I prefer to walk rather than own a car. Reducing stuff has actually made me happier, even though some people think it is depravation. I guess I am just lucky that I naturally don’t have the desire for a lot of stuff. This is not willpower for me, but rather out of a desire to be mobile and let the world be my playground!
You really seem to know what you want out of life and how to get it; the examples above make that perfectly clear. I wouldn’t call it lucky that you don’t have the desire to own a lot of stuff, but you should really treasure that mindset. A lot of people could learn a thing or two from you!
Thank you for dropping by and taking the time to leave a comment.
Too funny. I also find that speaking more than one language offers insights into how others think and view the world. There are wild differences, aren’t there, like how some languages have no future or past tense. Amazing.
Here are my 2-cents’ worth when it comes to a financial independence mantra: “L’essential est invisible pour les yeux.” – Antoine de Saint-Exupéry, Le petit prince
Translated: “What is essential is invisible to the eyes.” excerpted from “The Little Prince”
When we chase the material, we lose focus on what’s truly important and make less and less time for it. Those are the aspects of life people often regret not having paid more attention to when they get to the end of their days. When we keep that in mind, we indeed have “everything”, making the path to financial independence easier to achieve.
Language is a wonderful thing, which is one of the main reasons I studied it in university. People often underestimate how much of their identity and culture comes from the way they use words and meaning. Some languages have crazy syntax or grammar that’s completely unheard of in most Western languages – awesome!
Really love the quote – I read Le petit prince a long time ago in French! 🙂 Materialism in itself is not bad, but it can quickly lead to excesses. I love owning and playing around with good equipment as much as the next guy, but only to the point that it adds to my overal happiness, or “l’essentiel”.
Regarding SNES games: I am amused that you are sharing my love for SNES games! Installed F-Zero the other day and had so much more fun than with DIRT or the other sophisticated games on my fancypants PC. While I do not want to encourage piracy, I believe downloading 20+ year old SNES roms that have not been sold in decades can be justified. Throw in a wireless gamepad or two (quite cheap) and you can relive the experience for free.
Regarding the Trek Madone 9.9: Your current Trek Roadbike probably performs 95% as well as the Madone 9.9 and things really depend on the rider. In my city I see lots of very unsporty guys riding fancy roadbikes. It always amuses me to think that they paid a few thousands to save 2kg on their bikes when in fact they should have easily reduced 2kg of their own weight.
Ha, I’ve been a long-time collector of SNES games. Although I love playing modern games too, something always draws me back to the Super Nintendo. The 16-bit graphics and music simply add so much to the experience. When I can’t get my hands on a game or when it’s never released in Europe I’ll definitely try out a ROM, but in general I stick to buying the games. Just yesterday I started playing Chrono Trigger again (with my PS3 controllers hooked up to my PC), beautiful game!
The Trek Madone 9.9 would be awesome to own, but you’re right: it’s not worth the extra €10,000 on top of my current bike. The performance gain is negligible at my level, so why bother? And I always have a giggle too when I pass by people on expensive bikes that peddle at a leisurely speed instead of using their bike properly.
if you don’t know any other language it is normal to appreciate….hmmmmm…English! A 500 year old language which is not suitable to generate new words(thats why it is polluted with acronyms) and not mathematical at all.(please don’t tell me that you speak Dutch and German and Africano and so on: those languages which are only tiny bit different from each other)… anyway the post is not about linguistics….
From the list you put(full of acronyms but thats not your fault obviously) I only recognize the camera and the stereo system. I only have those. Sound system is there just because I can’t stand to hear music where higher tones are distorted. Expensive, but once in a lifetime thing for me. The other things you listed I don’t recognize. What a bliss for me 🙂
While I appreciate all languages equally, I find English fascinating exactly for some of the reasons you mentioned above. It’s such an amalgamation of other languages and history! And don’t worry, I only speak Dutch and English fluently, but I’m quite good at French and German too, while I also understand Spanish, Italian and Latin. Besides, I studied linguistics, so I know how most languages differ from one another.
A good sound system is an absolute must for me. Listening to music on a surround system that’s not capable of filling up the room nicely really takes away from the experience a lot. Glad to hear you’ve found good music equipement already!
I certainly don’t feel like I can afford everything, and I don’t have the means to buy anything. But when I focus on what I already have (a shelter, food, a fulfilling relationship, a job), it’s hard to complain. And yet, I do look into the future and wonder ‘what if.’ And that’s why i invest in dividend growth companies. To help propel my ‘what if’ days.
Anything might be a bit of an exaggeration, but overall there’s not much we can’t get our grubby little hands on, is there? Nevertheless, it’s like you said: focus on what you do have and see how that makes you happy instead of focussing on what you don’t have.
It is very important to balance out between the two otherwise we would burn out. Stocks in my watch list are my wants and needs. Problem solved 🙂
That’s a great mindset, BSR, good on you! 😀
Solid read. I believe we all feel such an implicit tension when operating from an investor’s mindset. I often find myself putting off the purchase of one thing because I would prefer another – all the while knowing I could have both if was willing to “break the bank”. However, I’m not willing to do so and instead have to make intelligent, responsible choices.
One of my weak spots (I’m sure there are worse vices) is my love of books. The way I prevent myself from overspending in this area is by putting myself on a “spending freeze” until I have read what I purchased last/some variation of such a deal with myself.
Thanks for the food for thought,
– Ryan from GRB
I feel what you describe all the time. A couple of weeks I bought a brand-new road bike and the only thing going through my mind at the time: “that’s almost €2,000 I could turn into passive income generating assets, is this a wise purchase?” Of course it was a smart purchase – not only do I really enjoy riding, my employer also pays me to ride my bike to work – but still there’s that tension between spending and saving.
You deploy the same strategy for your love of books like I do with video games. There was a time that I bought as many games as I could get my hands on (withing reason, of course), but what’s the point of owning tons of games that you never finish or even play?
You ask a deep and profound question and this at the heart of materialism as found in the U.S. There is a reason why credit cards are so popular-people don’t have to manage their impulses, they can give in to their impulses. This year I made a very profound change and stopped using credit cards. I am on a cash only budget and it has been a very illuminating experience because I am very clear now on what is important to me.
While I can’t really say I experience the same thing over here in Belgium/Europe because we don’t have a credit card culture (yet), I do see what you mean. It’s easy to give in to consumerist temptations when you have more money than you can spend at your disposal.
Personally I’m not really against credit cards when you use them in responsible manner, but all the more power to you if you feel like being on a cash/debit card only budget helps you to focus on what’s important!
Has the Taleb book paid off any dividends for you yet?
The best analogy I ever heard about affording anything you want is if you are able to walk into your local Subway and choose any sandwich you want without feeling remorse or regret about the money spent.
It’s a balancing act for sure between rolling the snowball bigger and bigger but enjoying a nice Subway or Starbucks drink whenever you feel like it.
The Taleb book did open my eyes to a couple of things. He draws attention to stuff I would otherwise never have noticed or given a second thought – thanks again for providing me with it.
The Subway analogy is quite good indeed! It illustrates beautifully how it’s not always easy to balance your wants and needs, or in our case our wants and investing as much capital as possible.
Hope you’re great over there in Canada!
Nice post, NMW.
It is a semantic distinction which is an important one. I had not really thought whether it existed in other languages.
You have hit the nail on the head, though. If it it truly adds long-term value to your life then it very rarely can be deemed to be too expensive. However, you need to know that it adds that long-term value.
The idea–as you say–of living between paycheck to paycheck is quite a terrifying prospect. Yes you can spend it all each month. But what happens when they stop?
Languages are fascinating that way! If you know just a couple you’ll run into quirky things like the anything/everything distinction all the time.
That’s what frightens me about being dependent on a monthy salary or paycheck: what to do when they stop and you have no way to make them come back again?!
You are still weak my young padwan..
After a decade of working and being frugal, I seem to notice that all desire for expensive depreciating toys dissapears. I invest in quality items and stocks and for the most part, the things I enjoy most are the ones that cost the least. A day off at work, swimming, reading, having a drink with friends..
Soon the apprentice will become the master, trust me!
Seriously though, I do wish I could play around with the things above, but I have no intention whatsoever to buy them. The problem with my hobbies and with the fact that I’m a technology buff is that I could go overboard really quickly. That’s why I focus on what I find really important, like the Trek road bike I bought two months ago.
Glad to hear you found what you enjoy most in life at a low cost!