What is an unFinanced Life? Part 1
Chances are you’ve never heard the term ‘unFinanced Life’ before coming to this blog. But don’t worry, you haven’t been living under a rock – it’s a term I created! If I were to boil the unFinanced Life down to a single sentence it would be this:
An unFinanced Life is a lifestyle created by adopting a mindset which uses money as a tool to increase our freedom in life.
As with many ideas, a single sentence doesn’t really do it justice. This entire blog is devoted to the many aspects of unpacking the practical and philosophical ideas of the unFinanced Life! In Part 1 of this post, we’ll take a look at some characteristics of what it takes to live the unFinanced Life. In Part 2, we’re going to discuss more practically how that may actually look for a person in each decade of their life and compare that to what seems to be the *normal* way.
Characteristics of the unFinanced Life
I’ve met a number of people who are living the ‘unFinanced Life’. And I’d like to think that my wife and I are doing this, as well. As a general rule, I’ve observed that people who are doing this have some similarities. These include:
- They have a healthy relationship with fear
- They understand what they truly value in life
- They have an internal locus of control
- They have a strong aversion to consumer debt
Let’s take a look at each of these characteristics.
A Healthy Relationship With Fear
Fear is a necessary part of life, but we’re really only born with two fears – loud noises and falling (although my daughter doesn’t seem to have any fear of heights!). Every other fear we have has come from culture and other external influences. And while some fears serve a critical function and are good for us, the truth is that a lot of us are ruled by unhealthy fears. Fear of change and fear of failure are two big ones which come to mind – fear of failure has always been a big struggle for me! It’s unhealthy when we face a decision for something we strongly believe in with an objectively reasonable expectation of success, but don’t do it because of an unreasonable fear of failure. Personally, I think that each time we make such a decision we lose a little piece of ourselves.
Living an unFinanced Life involves taking calculated risks designed to increase our overall quality of life. The thing with risks is that they can be risky, and thus result in fear. But the unFinanced Life recognizes that all things in life have risk, and we learn to control our fears to help us live in a way that’s more aligned with our values.
Understand what you value
My family watches very little TV these days. But occasionally we bust out the old rabbit ear antenna to watch something, and I’m always intrigued by the commercials. It seems like the message is usually something like this:
Without “whatever” we are selling, you will not be satisfied
The message is that we need stuff to be happy – or, more precisely, that without certain products and services we cannot be happy. And marketers are very clever in how they are able to craft messages that will quickly appeal to many base desires for things like status, meaning, or attractiveness. Marketers have done such a good job that many people intuitively relate happiness with buying things. Neuromarketing is a real thing! Scientists are teaming up with corporations to understand our brains at very fundamental levels, bypass our natural neural defenses, and get us to fork over more money. It is very effective and we need to instill thought processes to ward off this sort of thing.
The unFinanced Life is able to step back and ask – Why do I really want this? Will it really make me happy and help me achieve my goals in life? Am I being realistic about what this [thing] will actually bring me? If the answer is no, then it’s very possible the real reason we want whatever thing it is we want is… vanity (trying to look cool, impress other people, feel important, etc).
First, we need to know what things in life we truly value. For me it’s family, friends, faith, freedom, using my abilities to help others, and spending time outdoors. And certainly the realization of these values costs money – the goal isn’t to never spend money, its to make sure our spending is aligned with our values. So, we need to ask ourselves – is this [thing] going to get me closer to my objectives, or is it consistent with my values?
If you haven’t done this recently, go ahead and ask yourself – what things in life do I value? What really brings me happiness? And don’t immediately accept every answer at face value, sometimes you have to go deeper. For instance, “coffee” is probably not an answer here – go deeper. Yes, most of us love our coffee, but why do I really enjoy it? For me, it’s because I associate it with a good conversation. Therefore, if I want to go out and pay for an expensive coffee instead of make one for a fraction of the cost at home, it needs to be with another human being where I can sit down and talk with them. That is consistent with who I am and what I value and, within reason, usually represents money well spent.
These are questions most people never really ask themselves, but doing so can result in not only building wealth but also building a greater degree of satisfaction in life.
An Internal Locus of Control
According to Wikipedia, “locus of control is the degree to which people believe that they have control over the outcome of events in their lives, as opposed to external forces beyond their control.”
Thus, someone with an internal locus of control believes they are in charge of their destiny, they shape their own future.
While someone with an external locus of control believes that little is in their control and life just happens to them.
In our context, the person with an internal locus of control will rarely say “I can’t”, but instead says “I’ll do what it takes because this is something that I value.” There are people out there right now who are ‘retiring’ in their 30’s and 40’s. These people think, “forget what everyone else says, I believe I can do this and I’m going to make it happen for myself. It is within my power.” But it’s one thing to merely say it, the person living an unFinanced Life actually follows through. To do this, you have to be willing to take responsibility for your own life and your own decisions. I’ve never met a successful entrepreneur or someone who reached financial independence early in life who had an external locus of control.
An Aversion to Consumer Debt
Consumerism creates the mindset that true happiness results from material goods rather than things like family, friendship, and faith. When we have a consumerist mindset, we are often trying to fill our deeper needs in life with material things – which can leave us disappointed, wanting more, or both.
An article I read recently about consumerism had a quote from which said, “Compared with their grandparents, today’s young adults have grown up with much more affluence, slightly less happiness and much greater risk of depression… Our becoming much better off [in recent decades] has not been accompanied by one iota of increased subjective well-being.” Later in the article, the author wrote “materialists place unrealistically high expectations on what consumer goods can do for them in terms of relationships, autonomy and happiness.”
Many people have a tendency to go into debt to buy consumer products, perhaps from a feeling of ‘hey I work hard all day in a job I may not love, so I deserve this‘. The irony is the debt they take on requires them to continue working, whether they want to or not. Now of course I understand some people are in tough situations where the only way to get a needed product essential to living is to finance it – I get that, and it’s not what I’m talking about here. I’m talking about when we chip away, over and over, at freedom which would otherwise be attainable and now have no choice but to continue working just to make payments on stuff which may not bring us happiness anyway. In my mind, this is quite literally the definition of vanity which means “the quality of being worthless or futile.”
The unFinanced Life is able to distinguish between utility and vanity – and not just with consumer goods, but with their choice of home and area to live, among other things. They find much happiness in freedom and living a life (and using money) in a way that aligns with their true values. Money becomes a tool to increase freedom in life, not just a thing we use to buy stuff. It becomes empowering instead of enslaving.
The majority of the articles on this blog will be more ‘practical’ in nature (like ‘understanding market returns‘), but I felt its important to lay a foundation upon which those things are to be built. I can talk about budgeting all day, but it does no good if its merely a way to ‘spend less money‘ or ‘control spending’.
I’ve been fortunate to meet some awesome people who are living the unFinanced Life in some form or fashion, one of whom is a friend who goes by the online name ‘eveRide’. He turned his passion for dual sport adventure motorcycling into a full-time income by sharing his passion with the world – he is a really genuine guy who loves life and has chosen to live differently than most of us. This post was heavily inspired by a video he made and a conversation we had in Utah toward the end of my 2017 Motomancation (picture of us above). As you get to know me, you’ll quickly learn there are few things I love more than riding my motorcycle in beautiful country! Even if you don’t love motorcycles, this video is worth checking out.
And, of course, check out Part 2 of this post!