Throughout my past N years, I’ve always been a saver.
I find being frugal pretty easy. Not at the Warren Buffett level – I have changed both car and house a few times now. In fact not even to the level of my parents or grandparents (who were very much the war generation). But between me and Mrs FvL, I have always been the saver.
My expenses have been well above the national average for years, but much of this has been discretionary around two or three particular themes – travel, dining out and gadgetry. Over the years, lifestyle inflation has crept in. My ‘standard’ restaurant meal out in London now costs £150 for two – whereas not too long ago £90 would have covered most eventualities. But I have avoided too many fixed costs – and I have always had the mindset that if times were hard I could change down gears and still lead an independent, fulfilled life.
Something has changed this year. I’m not quite sure what, but it is probably some or all of the following:
- 2021 has been something of a bumper year for my net worth, driven both by market returns and also a couple of income/angel investing windfalls.
- My spending has dropped significantly since Covid-19, with travel and dining out both being massively curtailed in London at least until recently
- I have an increased sense of my own mortality – partly due to catching Covid-19, and partly due to the passage of time / friends getting cancer / similar. I’ve been playing the FIRE game for 9 years now, and during that time my net worth has grown dramatically, and my expected remaining life span has shrunk significantly.
While each of us has a different ‘number’ to hit, and mine is almost certainly higher than most, my invested portfolio has been larger than I might reasonably need for some time now. It would take some horrendous cocktail of a horrific divorce, some chronic medical condition and a stock market failure to create serious jeopardy for me.
Oops – how £££silly of me
One of the ways I have changed is I now almost revel in suffering financial ‘accidents’. Incidents like booking travel tickets for the wrong day, stupidly dropping my new bluetooth headphones in the sea, or trashing a new pair of trousers would have ruined my financial month twenty years ago. They would have left me in a foul mood for a week not too long ago. These days I take 10 deep breaths, remind myself how lucky I am to be able to throw money at the problem, and then throw money at the problem.
They need it more than I do
But more widely than just having a financial comfort blanket, in other ways I find myself turning almost profligate with money.
My mindset around tips has changed significantly. I now routinely leave massive tips. Particularly to individuals in hard-hit sectors, like restaurant staff. The restaurant sector has had a torrid time, and visibly can’t get the staff. So I want to make sure the staff know I appreciate them! I round up aggressively. 20% tips are not uncommon. I give tips on Uber, Deliveroo, my hair dresser, my gardener, you name it. I know these folk benefit from the money much more than I do.
I have also upped my charity donations dramatically. Not just by trying (though failing, so far) to follow through on my promise to myself to donate 5%+ of any windfall to charity. But also by making multi-year pledges, amounting to five or even six figures, to causes that I want to support. Even relatively recently I would have felt I needed to look after my financial independence first, and charity could take only strictly affordable numbers second; these days I have more confidence my financial independence is here to stay and I don’t want my favourite causes to have to wait until I can no longer see the benefits of supporting them.
Treating my favourite people
I have always tried to ‘pull more than my weight’ in terms of gifts for family, buying rounds in the pub, and so forth. But I am taking this to another level these days. Within the last few weeks this includes:
- Taking six old friends out to a box in the Royal Albert Hall
- Organising – at my expense – an extended family holiday
- Blowing the budget for one particular family member’s Xmas present
I run the risk of seeming ‘flash’, or setting unfortunate precedents, or creating monsters. However overall the enjoyment I get from this generosity is substantial, and so far at least adverse repercussions are negligible.
Lastly, and the area I feel most ‘guilty’ about, is
wasting money on investing in the finer things in life. I’m exploring parts of the wine menu I’d never normally venture into. I’m occasionally – if the price is ‘reasonable’ – buying first class train tickets. Uber Comfort (the fancier version – a London thing) is now my default mode of taxi transport. I don’t need any of these things. And I am not a particularly worthy cause. But at the end of the day, the ‘what else is the money for?’ argument has finally hit home.
The Richard Branson test
As F Scott Fitzgerald put it, the rich are different to you and me. There is one particular aspect about being rich that has crossed my mind. Namely that I have reached a point where it is now potentially tricky to make a customer complaint – however justified that could be. My wealth is not widely known – but it is not a secret either – and so I ask myself whether my behaviour would pass the ‘Richard Branson test’ – i.e. if you were to see/hear that Richard Branson complained about poor service / ask for a refund / not pay a tip / similar in your local restaurant/pub/dry cleaner/etc, what would you think? I think most people would think ‘what a so-and-so’ and on that basis Mr Branson pretty much needs to grin and bear it, cough up a tip, and keep smiling anyway – no matter what the experience. In this respect, the rich are different. While I am obviously nowhere near the Branson billionaire status, but I do try to keep myself in check – and remind myself that whatever I may feel, I am fortunate in the relative scheme of things.
7 thoughts on “Feeling rich”
Very self aware post fvl and I’ve been going through a similar journey.
one of the happy outcomes of what has been an absolute horrendous end to the year (mother passed away recently in November, a shock from her will and a friend dying a couple of weeks ago all while I’m changing jobs for the first time in 17 years ) has been for me to take stock of where I am and try and live for today a bit more. And that includes giving now.
Through necessity /obligation I’ve had a number of personal and charitable expenses this month. I’ve bought a car for my mother’s long term companion to prevent him being stranded at home, given generously to the fund for other residents of where my friend passed away. I’ve also paid a low 5 figure penalty to break a long term fix and remortgage to a better rate. I’ve paid for my mums funeral. I’ve bought an engagement ring . All while not earning having taken a short career break.
A mid 5 figure sum and What would have felt like an absolute fortune even a couple of years ago and stressed me out has barely registered from a net worth pov. My net worth will likely tip into the double comma club by next year end.
This is not trying to be flash or indeed virtue signalling. More that its incredibly easy to forget that this not ‘normal’. I’ve done the hard work and as long as I keep my mandatory expenses low I don’t need to save a penny more and I’ll be fine.
I’m also resolved to invest in myself a bit more. I’ve rejoined the gym, have a private health check booked in January and am sorting a couple of other health niggles while I’ve been off work.
Unfortunately the diet has well and truly gone out the window over Xmas but back on it from today!
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Very interesting reflections. I’ve recently come to appreciate not equating the most expensive option with the best option. One example is finding it much more interesting using public transport abroad (with all its challenges) rather than taxis, or worse, being shepherded on a ‘luxury’ tour package.
I think it’s also important not to make life too easy. You can throw money at a lot of problems but at the risk of becoming numb to life’s day-to-day hardships (which are really not hardships at all) which can ultimately lead to a background sense of dissatisfaction. I forget the philosopher, but he made the argument that utopia could never exist as we would create anarchy in the pursuit of challenge (or more accurately, there must be chaos for there to be order).
It’s interesting to note that the average American now is richer than Rockefeller was 100 years ago. To take air travel, the miraculous aspect to be grateful for is the ability to travel in an aluminium tube at 550mph at 30,000 ft – not how much legroom we have.
Finally, I would strongly recommend GiveWell for your charitable donations. They have an evidence based approach aiming to maximise impact for every £1 donated. These are often charities with less glamorous narratives and almost certainly not acting in the developed world.
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Ah, restaurant tipping. We Brits seem to be caught between North America and Europe, not knowing what the hell to really do. It seems odd to tip a percentage of the price of the product, resulting in an amount unrated to the work. Surely better to just bung them a tenner, or whatever. But then you think, shouldn’t their employer be doing this? And what about the people in the kitchen? And why am I doing this in some places and not others? Hmm.
“I’m occasionally – if the price is ‘reasonable’ – buying first class train tickets”
Years ago I, not remotely rich, commanded my wife always to buy herself first class railway tickets. We just couldn’t afford second class – it was the subsequent physio bills that were the killer.
Never heard of the Richard Branson test! Good one. I will only complain if I don’t get what I paid for. And it won’t really be a complaint. It will be a confrontation to ask that I get what I paid for that’s all.
I love this! Revelling in the mishaps, upping the level on giving, all of it.
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[…] gadgets, etc. These are short term and fairly small beer in the scheme of things but my ‘feeling rich‘ post of a few weeks ago already feels rather out of […]