I can’t remember at what age I started buying into the whole "bigger is better" philosophy and acquiring more stuff was somehow the ultimate goal in life. Within the last couple years, but more recently the last several months, I’ve been focusing on simplifying major areas of my life to achieve more freedom to pursue things that are more important to me. To me the most important freedoms are:
- time freedom: the ability to do what I want, when I want
- financial freedom: the ability to earn, spend and invest whatever I want
- location freedom: the ability to live, work and play wherever I want
- creative freedom: the ability to think about what I want
If an area of my life is causing me to have less freedom then it's got to go or I have to figure out a way to simplify it. Here's what I've done to simplify my life:
Perhaps my largest downscaling was by leaving my 9-to-5 corporate accounting job. Going from a good paying job with excellent benefits, retirement, and the stability of a paycheck to an uncertain future in self-employment may seem like a foolish move. But I’m pursuing my dream of launching a lifestyle accounting business. No alarm clock, no commute, no work clothes and no office politics. In return for giving up all that, I've gained more a lot more time. Time to focus on how I want to spend my life meeting interesting people and building a business.
My living situation
This year, I sold my three bedroom house, moved into a studio apartment and happily became a renter again. I’m enjoying a low maintenance living situation and prefer to spend my time doing things other than vacuuming, killing black widows and raking leaves. Like James Altucher wrote in his article about why he's never going to own a home again, I’ve realized renting is not throwing money away and it’s not a bad thing to keep off being a homeowner for the foreseeable future. By selling my house, I also was able to access my home equity and create a financial cushion while I build my business. The location I moved to is also better as it's a walkable city and I'm a short drive to the airport. I don't necessarily want to become a digital nomad as I do like having a home base, but being a renter allows to me pick up and move if I want.
Despite my desire to learn more about investing, tax saving moves, and improve other personal finance areas of my life, I do focus on simplifying my financial situation. Spending less time keeping track of my finances and spending more time living. Here are some ways I've simplified my finances for less administration and maintenance:
- Rollover my former job's 401(k) to reduce fees and consolidate into my IRA
- By selling my house, I eliminated the need to track house value, mortgage, and escrow account
- Invest only in low cost index ETFs, and stopped investing in individual stocks
- Simplifying my tax return by eliminating the need to file Schedule A
One of my biggest financial mistakes ever was financing a $27K SUV. I still shake my head at how I got sucked into upgrading my paid off car into a gas guzzling V8 I rarely drove. After a year and a half later and thousands of dollars in maintenance, repairs, depreciation and upgrades I finally sold that car and went car free for four months. During the time I didn’t have a car, I managed to save up some money so I could pay cash for what is now my current car. I followed Financial Samurai’s 1/10th Rule For Car Buying Everyone Must Follow and bought something more within my means. The maintenance expense is low, I drive very little, have pay-per mile insurance, and plan on holding onto it for as long as I can. With my move downtown, I'm close enough to many amenities I can simply walk to or take a cheap Uber ride.
Naturally by selling my three bedroom house and moving into a studio apartment, I had to get rid of furniture and other items. Although I don’t label myself as a minimalist, I like practicing minimalism, because the idea of owning less stuff is incredibly freeing. Each time I move residences, I take it as an opportunity to go through all my things and get rid of the stuff I no longer use. Here's ways I've been ridding my life of this stuff:
- sold some household items, furniture and other gadgets on craigslist
- donated many things I couldn't sell to Goodwill and the Salvation Army
- gave things to friends and family I knew they'd get more use out of than me
- organized, scanned and trashed much of my paper files
By far, the most drastic area of my life I simplified is my mindset. I've evolved in my way of thinking not only on physical possessions but the thoughts I've had. By eliminating a lot of the "stuff" in my life, I've gained so much more mental capacity because I focus less on owning, maintaining, buying, and storing things. This also intertwines with my thoughts on money. When working a career I was no longer excited about, I had thoughts of early retirement. Now that I've quit the career and consumer mindset and I'm working on building a business, retirement doesn't matter. Why would I want to quit something that excites me? So naturally, I'm not worried about maximizing income and worrying about optimizing every dollar. That's not living, at least not the kind of living I'm interested in doing anymore. I have a more abundance mindset and I'm more interested in collaborating than competing. More giving and less taking. I have enough money and enough stuff to last me a long while. I'm starting to use my brain for more intentional living now and with the goal of helping others achieve greatness.
The Bottom Line
Doing all of these excersices in downscalling hasn’t in anyway sacrificed my quality of life. In fact, it's greatly added to my quality of life. I’m living the lifestyle I want and I can do pretty much everything I want. Each of us has areas of our lives that could use some downscaling. Less can be a whole lot more and give you more time, energy, and focus.