Springtime in the mountains is a time of renewal, but it’s also a time of discovering the destruction that nature has wrought while everything was under a blanket of white. It’s discovering which trails are now blocked by rockfall, marred by erosion or washed out altogether. And — toughest for me — it’s seeing which trees fell during the winter. I definitely get attached to certain trees, and even name some of them — the Admiral, Medusa, the Gemini. Last weekend, while we were on our first real bike ride of the season, I noticed an absence in the skyline, and looked around frantically only to see the tree we’d secretly named the Wizard, and that I’d even more secretly always whisper-greeted as Dumbledore, lying on the ground, little more than a rotting, twisted, weather-bleached trunk. Circle of life and all that, sure. But it’s also sad, the absence of a friendly sentinel who’d marked my passage through space, and — more obviously when it’s gone — my passage through time.
The Wizard (er, Dumbledore) in his former glory. Obviously he was a he.
On some level, I think all of us who pursue early retirement know this.
We know we may not all get 80 or 90 years, and so we work hard to shift the timeline in our favor, increasing our chances of having as much free time as possible. There are plenty of people who prefer not to think this way, who look toward the future with blind faith. But we don’t.
I don’t believe this is the only thing we all have in common, though our lives may otherwise vary in every imaginable way.
What do YOU think we all have in common? And are certain people predisposed to embrace the financial independence mindset, while others are inherently ill-suited for it? Come chime in in the comments! I share my take below.
Calling a Splurge a Splurge
We jokingly call our higher spending era our baller years, but in truth we were only ballers in a few categories, namely travel, decent wine and fancy restaurant meals. Though the higher spending on travel was really just that we traveled, not how we traveled. We’d still stay at totally normal hotels and shop around for the best deals. And when we ate those expensive meals out, we still pulled up to the restaurants in our no-frills Honda Civic, wearing our <$60 shoes, me carrying a <$30 purse from DSW that had long since gone out of style. (Pro tip: Only buy black accessories. Then they’re passable forever.)
What we think saved us, and made it possible to transition into the early retirement mindset was that we never forgot what a splurge was. If we dropped serious cash on a meal, we knew we were dropping serious cash on it. The few very expensive things we ever bought — a Thomas Pink shirt for Mr. ONL, a Movado watch for me, a half bottle of Chateau d’Yquem — we viewed as massive treats, and didn’t shift our anchors to think that every shirt should cost $200, every watch should cost many times what a Timex costs (or that you need more than one or two), and every bottle of wine should be collectible, even if we could theoretically afford to pay those prices.
Meanwhile, some of the friends we might have stayed close to if we’d stayed on the other coast started to take those splurges in stride. They started to see a $200+ dinner as normal, a $300 purse as “just what a bag costs,” and whatever princely sum Blue Apron and others charge for a “home-cooked” meal as “totally worth it.”
Where Lifestyle Inflation Happens
I’m convinced that that’s the point where lifestyle inflation happens, not in the splurges themselves, which are fine in moderation and might be what we need to feel good about working hard at demanding jobs. No, where lifestyle inflation happens is that point where we forget that something is a splurge, and we let our anchors reset to make that thing our new baseline.
And it’s where we stop splurging strategically, on those things that make us happiest (like travel and restaurant meals, and the occasional good bottle of wine), and start splurging on everything. If everything is a splurge, nothing is a splurge, or so it seems.
Somehow, we managed to never reset our anchors, even when we’ve been surrounded by people whose idea of a splurge has shifted considerably. We still think jeans should cost $40 at most (preferably less on sale or secondhand) despite having friends who think $200 is normal, and though I might tweet pictures of fancy salt, we’d never actually buy a $30 rock of Himalayan pink salt with coordinated grater with our own money.
I bet some people reading think $40 for jeans is a ton, and others think we’re major cheapskates. The point isn’t that there is a “right” price for jeans, or anything else, but that we each have anchors that dictate what we think something is worth. And it’s easy not to notice when those anchors shift ever higher.
The Baseline Is What Matters
I’m not trying to downplay our spending in those baller years by talking about how it was limited to a few categories. We spent a lot on those splurges.
Confession: We had dinner at Per Se once. It was $1000. For two of us. It was amazing, and we’ll remember it forever, but we won’t blame you if you judge us, especially when I tell you that we also flew many hours to New York specifically to have that meal. I know.
I’m sure we sound like complete a-holes for dropping that kind of money, but we never for one second forgot that meal was a once-in-a-lifetime experience. Which matters, because:
As long as you see a splurge as a splurge, it’s easy to let go of that spending, and just default back to your baseline spending.
In our case, even in our baller years, our baseline spending minus the splurges was pretty reasonable. I grocery shopped with coupons (don’t worry, I’m over that), we didn’t buy much stuff and what we did buy was deeply discounted, and we outsourced very little of our lives. It was actually pretty close to what we spend now, not counting the mortgage we’re no longer paying.
If we’d started seeing takeout dinner as a necessity, feeling like we couldn’t live without weekly maid service, or gotten in the habit of leasing a new car every few years because we deserve it, then our baseline spending would have looked and would probably still look very different. We’d probably be nowhere near retiring now. But because we kept the baseline low, it was actually easy to go from semi-regular big splurges to much less frequent small splurges once we understood the math on early retirement and realized we’d rather not work forever than live like ballers.
We attribute all of this not to some massive virtue (hi, I just said we dropped a grand on dinner), but to stubbornness. If you can get a perfectly good shirt for 20 bucks, our minds tell us it’s crazy to spend more than that. However, 20 bucks won’t get you a meal at Per Se, a trip to Japan or the chance to taste a Chateau d’Yquem, which is why we were cool with those splurges.
Are Some of Us Predisposed to This Mindset?
Thinking through all of this, and realizing that sticking stubbornly to our anchors is what allowed us to jive immediately with the FIRE mindset, made us wonder if this is something we all have in common. So that’s a question for you: Are you stubborn with your anchors, too?
And something else that strikes us is that our lifestyle inflation was always strategic, a few dumb impulse buys notwithstanding. We didn’t start spending more on everything as soon as we could afford to, we just picked a few key areas that added value in the areas of life we care about most. So another question for you: Were you selective with your splurges or lifestyle inflation, too?
That reasonable baseline spending is something we’re ultra grateful for now, especially whenever anyone asks us what we’ve had to sacrifice to achieve early retirement. We traded the fun of splurges for the thrill of checking off big financial milestones, but ultimately not all that much about our lives changed. So one last mindset question: Have you always had a level of baseline spending — your “enough” spending — that you could default to painlessly, even if you also splurged?
Observations on Our Mindset in Common
If there’s something that’s struck me more than anything else in meeting lots of FIers, it’s that we as a group seem to genuinely care less about impressing others than the average person. To be honest, with my gold star problem, I feel like the anomaly here. Although, despite my love of pats on the head, I’m also rebellious deep down, and can’t think of a single time outside of work when I’ve done something because someone else wanted me to. So maybe it’s that we’re more headstrong, not that we don’t care what others think. (Thoughts?)
We are also people who aren’t satisfied with the conventional wisdom, and probably drove our parents crazy as kids asking them “Why?” and “Why not?” We’re skeptics, and questioners, and if we get some inkling that there might be a better, faster, more efficient way to do something, we will walk away from the herd to do things differently.
Are There Some People Who Can’t Get to an FI Mindset?
This is a genuine question: Could everyone, if persuaded effectively, come around to an FI mindset? Maybe not in the first conversation, or the first 10 conversations, but eventually? Or are there some people who couldn’t get there? Perhaps people who:
Have overly malleable anchors, and let them shift too high
Are inclined to inflate their lifestyle across the board, not strategically
Refuse to see the difference between “enough” and splurges, between needs and wants?
Care too much about what they project outwardly
Are just fine with the status quo
Or, people who:
Can make the mindset shift but can’t see a path out of their current financial situation, so don’t bother trying to reach financial independence
I remain an optimist that people can change, though not everyone does change. Change is hard, after all. Introspection, facing up to our weaknesses, changing ingrained behaviors — none of those are easy. But choosing not to take on those hard tasks isn’t the same as not being able to change a mindset.
Now It’s Your Turn!
So many questions in this post you could choose to answer! Please chime in with your sense of things in the comments! I’d love to know your take on anchors and baseline spending, and whether you think some people are more predisposed to the FI mindset than others. Also any other traits you think most of us on the FI path share? Fire away! (Bah dum bum.)