consumerism, degrowth, financial independence, happiness, stoicism

The more you buy the happier you’ll be (or not) – Positional goods

There are two enormous pitfalls (among others) when trying to save money, one of them are positional goods, the other is lifestyle inflation.

Lifestyle inflation, is when, upon increasing our income, we increase our expenses “because now we can afford it” often, increase the expenses more than the income. So one buys a bigger car, or a bigger apartment, or goes on holidays to more exotic places. After a while, that becomes the norm, you get used to it, and then you need another slightly more expensive car, etc.

In this article I will discuss positional goods, we can leave lifestyle inflation for another day.

What are positional goods?

But today’s post will go deeper into positional goods, what are those so-called goods that are positional? It is basically, a good (or service) that is used to signal status among our peers. That can be any of the things mentioned in the above paragraph (houses, cars, holidays, suits, jewelry, etc.)

Most importantly, those are things that do not really give any value, only the satisfaction of researching about it, buying it and being happy about buying it. When one has got used to it, then the happiness level goes back to where it was before acquiring that object (or service).

For example, a drill, or a bicycle or a car, are not necessarily positional goods, but they can be as soon as you convince yourself that you need that drillmaster 2000 (or whatever fancy drills are called) or a sports car, that you are falling in the Consumerist trap buying shit you do not need and that will not make you happier.

A Little Story

It also happens to me, about 4 years ago, I bought a watch that I thought I would own and wear forever, nevertheless, after some time, I started to think it looked out of fashion, and that I was not so happy about it any more.

Therefore I have since started to think of buying a watch. I am perfectly aware that a new watch will not turn me into James Bond.

the-watches-of-james-bond-lead-full

Bond himself

But still, something in my unconscious mind, tells me that it will.

This is why, after realizing that, and reflecting on it. I am currently selling all the watches that I own, in order to buy one simple, low-maintenance utilitarian watch.

How can YOU avoid falling in the positional goods trap?

First of all, one needs to be honest with one self and be self-aware, otherwise that is nothing can possibly be done.

Second, realize that is not something you NEED, it is something that you convinced yourself that you need, but you will be equally happy without it. In many cases, we tell ourselves that we need a newer car, for example, or that we need a car, when many, many people can perfectly survive without a really expensive vehicle that is idle more than 90% of the time.

At that point, you will realize that you do not need that, but then you will say “I want it anyway, I can afford it”. Well, most likely, even though you think you can, you really can not. A VERY easy rule, is: If you need to borrow money for it, you most definitely can not afford it.

If you do have the cash for it, that you should make the exercise of thinking, how that fits in your budget and in your financial goals. Most of the time, it is still not worth it. Because you spend money now, and in 3 to 6 months, you will be exactly as happy (or unhappy) as you were before spending that money.

I rest my case.

 

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consumerism, financial independence

What is your dreamhouse? Answer: a Myth

The dream house myth, is shortly told, the myth that you will find a house that is “what I always dreamed of” or the house that “is just so me”.

That is a myth and a marketing trick to make people buy houses (and actually all kind of things) that we do not need.

Therefore, when you have to buy/rent a house/apartment, NEVER get attached to it, look at it in purely logical and utilitarian point of views and you will make a good choice.

(that can actually be applied with all kind of consumer goods)

my-dream-home-1345772

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consumerism, degrowth, financial independence, stoicism

What is Financial independence, and how to get started

It has been a few years since I discovered the current of people striving to become financial independent, the goal of many of these people is to not need to work any more in their life. If that sounds interesting to you, keep reading.

People who are financial independent, continue to work in one thing or the other, as working is an integral part of being a man and a human being and the obtain pleasure in doing so.

So it does not necessarily mean, that when you or me achieve financial independence, that we will be sitting on our couch watching TV and being on Facebook but instead, we can pursue other endeavors.

First, one might think, that for normal working people it is impossible to become financial independence, and it is NOT easy. It is very tempting to buy a new computer, a tv, a nice house with a garden etc. but unless you are rich, if you want to become financially independent you need to accept something, there are things that one cannot afford, that goes directly in sync with stoic principles.

So drop the Consumerism get acquainted with Mr Money Mustache and Jacob Fischer, and realize, that if you save, for example 50% of your salary, for every day, month or year that you work now, there is a day, month or year that will not have to work in the future.

If one factors in inflation and investments (we will talk about that in more detail in the future) the effects can multiply, and if one is as smart as Mr Money Mustache, there is the possibility to start smaller businesses that contribute to the income.

So, maybe you are not ready to save 80% of your salary (I can only save 60%) start by taking away a small percentage, and ask yourself if your next purchase will give you happiness in the long term, and if that is better than the feeling of going to work, knowing you can quit any second, that you do it because you like it and not because you have to.

 

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consumerism, degrowth

Why degrowth?

It is quite simple, planet earth has LIMITED resources. The human species is growing exponentially, human consumption is also growing exponentially.

It DOES NOT MATTER, if we become more efficient, we use solar or wind energy (so called green), NOTHING matters. If we keep growing we will exhaust the earth resources.

Anyone that has a normally developed cognitive ability will understand it if he or she can for a second liberate from the shackles of the daily brainwash that tells that growth is the only way forward.

Let’s show it in a graph:

Screen Shot 2017-07-27 at 15.02.52

Now we are in the path of the blue line, we will run out of resources soon.

Many advocate for the red line, that is not enough.

The green line shows the rate at which the resources would replenish in theory.

But we are destroying the planet, so its capability of replenishing diminishes.

The lines are for indication, but I think they show clearly why “sustainable growth” is science fiction as it is mathematically impossible. We should all wake up and realise that even though we feel nice by recycling or by consuming renewable energy.

Do some research and find how mines for solar panel materials look like. Be horrified.

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