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.