One of the things that frustrates me most about financial planning and financial planners is that it seems we’re simply in the business of helping people accumulate more. More of everything—cash, stocks, bonds, mutual funds, houses, cars, collectibles and other belongings. Indeed, how many financial success stories are based on depictions of households who have LESS this year than last? If anything, the financial industry may be in the business of inspiring a spirit of greed—albeit in the guise of commercials and marketing slicks with beautiful, ageless smiles in ideal settings typically involving sailboats, golf courses and vineyards. Come pay us to help you get…more.
And I don’t think anyone would deny that we, as a country, bought it—hook, line and sinker—over the course of the 80’s and especially the 90’s, during the birth of the now foreclosed McMansion. Yes, it was as if an entire generation of Americans consented to hopping aboard a giant hamster wheel of accumulation, all striving toward the imaginary objective of acquiring enough stuff and a pot of money big enough to sustain a comfortable level of consumption through to the grave. The results speak for themselves: a housing bubble that has left a quarter of the country under water, the corresponding market crash that left a slew of investors without a positive rate of return for over a decade, perpetual car payments and credit card bills, the decline of selfless charity, the demise of the single-income household and millions of workers who abandoned their dream jobs for whatever would pay the most money.
Fortunately, we’re starting to see a shift away from our self-worth being determined by the square footage in our houses, the emblem on our cars or the title on our business cards. Led by a generational strain more impressed with subjective quality than objective quantity, folks like Tammy Strobel, author of the book You Can Buy Happiness (and it’s Cheap) and the Rowdy Kittens blog, are showing us by example how LESS really can be MORE. Prone to material minimalism and houses as small as a parking space, they are not condescending or judgmental. They’re just choosing to live a different way, disregarding much of the supposed accumulation gospel preached by the financial services majority, and inviting a growing community to do the same.
Tammy and her husband, Logan, are both 34 years old, and while she told me it wasn’t a particularly easy transition to go from the life they had to the simplified one they have, it has been a wholly gratifying experience they’d never trade. A few years ago, they were spending in excess of $70,000 of household income, and they owned two cars and a big apartment filled with stuff. Now, they live in a tiny house—128 square feet!—have no cars and rarely have monthly expenses in excess of $700. I’m sure your response to that was similar to mine: “That’s crazy!” But they have simply chosen to value relationships, community, independence and the most valuable commodity of all—time—over the everyday trappings that dominate most of our lives.
What is to be gained by simplifying life from a physical and fiscal perspective? It“… allows you to create your own lifestyle, one with the freedom, money and time to do what you love…” according to Strobel. Sounds an awful lot like the promises offered in a retirement planning pitch, doesn’t it? But many of these folks are living this unique style of financial independence decades away from a traditional retirement age.
While these simplifiers may be light years away from qualifying for any of the big dogs’ wealth management services, they’re actually living by the foundational precepts of sound, commonsensical personal finance. And while some may be inclined to dismiss them as a cult of upstart hippies, their behavior is more vintage and classically conservative than nouveau and socialist, most closely representing the habits of our grandparents and their parents. Those generations actually owned houses they could afford, using mortgages sparingly. They put in a day’s work and enjoyed the balance of their time with family and friends. They considered a single car—much less two or three—to be a luxury, and couldn’t have imagined using leverage to buy one. And they spent more time seeking to reduce their expenses than increase their income. What a novel notion.
If it sounds crazy for a financial planner to be lauding deleveraging, downsizing and dispossessing, please let me remind you that the goal of the best financial plan isn’t necessarily to have more money…but to have a better life.