#5 The meaning of life

The first one to tell me the title of the book this picture referres to gets a free guest post 😉

Woao, this is a hell of a title for a small post, isn’t it? Maybe a bit too big shoes to walk in? Maybe, but however, I just had no other idea to introduce what I am trying to write:

What the hell are the important things in life?

Well, lets start out with a bit of economic theory.

Background: I turned to economics some years ago to learn better how to live a good life. I learned a lot there, and certainly improved massively in handling my money and better understand economic affairs (happy to share this if anyone requests), but no, they could not help me with the way to live your life.

What does economic theory say?

The part of economic theory that’s dealing with the individual is called Microeconomics, in contrast to Macroeconomics. Classical (more that 100 year old) Microeconomics measure everything you do in so called “utility” (=well being or “Nutzen” in German), meaning the “utility” you derive from certain actions or consumption. Basic utility  theory comprises things like decreasing marginal utility (e.g. the first burger gives you a lot of utility if you are hungry, the second a bit less, and the 5th probably no more additional utility at all…well, probably – I don’t know your eating habits though…).

This is a fairly vague concept but it makes a lot of sense and is worth studying.

Problem is that it’s difficult to measure utility. But as economic mainstream since the 90s is very eager to measure everything, very often utility is set equal to money.

This is the first mistake:

Many people (and politicians and consultants and managers) think that maximizing money equals having a good life.
This is incorrect. Correct would be:

Happiness is key…

…and the amount of happy (or contentment (=”Zufriedenheit”), as always happy seems unrealistic) time that you spend in your life. No matter where the happiness or contentment comes from, be it consumption, hanging out, listening to good music, having sex, travelling or just starring at a wall…whatever you like.

The second mistake is that most people, and surprisingly many economists as well, forget about the above mentioned law of decreasing marginal utility.

Thus they incorrectly assume that a lot more money will give them a much better life.

Correct would be:

Money is not bad, but it comes with a cost. Thus is depends if more money (and the associated costs) is better or not.

Let’s discuss this in post #6.


#4 The right balance

The right balance

Ever read about the hard-core early-retirees in the internet?!

Wow, these are tough guys, saving every cent twice and reduce their financial needs to a bare minimum.
I admit, it’s great fun reading their stories, and there is lots to be learned about a different angel how to look at the world and their way to financial freedom, so you should pop in and visit them at one of the links in my link-list.
But personally and being a starter in the world of downshifting, I’m not there yet, it’s just too…hm, extreme for me.
It’s certainly very efficient and maybe also rewarding to entirely give up cars, holidays, your job and almost anything that costs money to downshift to a level of bare minimum spending (sometimes this extreme form of downshiftig is called simple living). But man, I don’t know what you think, but I still enjoy having diner out once in a while, spend money in a cinema or pub; and above all my family enjoys travelling far and long- certainly not the most inexpensive hobby ;-).

On the other side there are these hectic guys who work their asses off, who can’t look anyone in the eyes for more than two seconds, who are making a steep career (or trying to), get their first depression or heart-attack at age 40 and save money for (hopefully) being independent later.

I think this is a poor choice either. Why?

Because this is what happens:

  • Work can easily get work for its own’s sake. The more you work and stress yourself, the more you forget how really to live and what for you are doing all of this shit.
  • You are sacrificing time, health and social ties to family and friends in what maybe some of the best years of your life!
  • You adapt to the higher levels of income and wealth that you are generating and that you see around you in the “higher ranks” of the company/society. Thus you will not be able to appreciate this any more.
  • Your returns are uncertain. Might well be that inflation, tax, bad investments or health troubles will take away the joy of spending your money later.

I am convinced:

It is better to live here and today!

I'm not a Buddhist, but this Buddha
sure was a clever guy I'd say...

So here is something that we might learn from the Buddhists:

The best way is the middle way!

I think this holds true for many aspects of life when looking for independence, freedom & happiness.

It’s not necessary to work like hell to finance your happiness and financial freedom.
And its not necessary to cut down to the bare self-sustaining minimum in one big step. Maybe later, but first steps should be realistic.

Enjoy your day and see you at post #5.

#3 What does it need for an independent and happy life?

Let’s quickly outline the main ingrediences of hapiness that we probably will touch again and again in the posts to follow.

To live a satisfying, independent and happy life you basically need three things:

• Money
• Time/Freedom
• An idea what to do with your freedom

Lets first start over with money:

...not too bad to have some of this...

Let’s be frank about this: Without any money, life probably is not much fun. There might be exceptions, but me personally is not one of those.
Therefore the important question is: “How much money do you really need for a good life?”
My answer is: “Much less than you think! And probably even less than you have already!”

Why is this the case?

The first reason…

… is decreasing correlation between money and well-being. That means starting from zero, having some more money will increase your happiness massively. This is obvious to most people.
But if you already have a certain amount, additional money will not make you any happier in the long run.
This is not very obvious to most people, and even I have to remind myself from time to time about this fact.
A fact that is indeed scientifically proven, but I’ll come to that later.

The second reason…

… is that you probably might have enough money already, but you spend it inefficiently and on the wrong things.
If you look at it closer you will be surprised, how much money you can actually save easily without noticing any difference in the quality of your life.
Anyway, looking into saving money is a bit less sexy than spending money, thus we too often avoid to scutinize our spendings.
But if you recall that every needless spent Euro or Dollar you saved is a Euro you can spend on something else, its easier to understand that saving and efficiency in spending is absolute key to financial independence.
I guess every financially successful person among you or others will agree.

So I’ll write a lot about money, as it is undoubted the fuel for our independence. I’ll write later how I reduced my families’ turnover by more than 20% without any loss in perceived life quality. And we will find out where your money is eaten away without any additional quality added to your life.

Then we come straight to Time…

...look at this guy! He probably has all the time in the world...and beyond (Meteora Monastery in Greece)

If I had to rank, I’d say that time in the end is even more important in life than money.
Where money is the fuel, time is the car. Without a car there is no use for fuel.

Time is the one resource that is definitely limited for everybody and you have only little means to expand it (one is staying healthy, but we come to that…).
It is thus absolutely crucial to maximize the amount of time you have available and under your control and that you enjoy that time as much as you can.
That means we have to minimize the time that we spent being bored, annoyed, anxious, stressed and as well time that we don’t feel anything at all because we are working like a robot and without having fun.

As we have to spend quite some time to make our living, I probably will spend a lot of posts on “How to earn sufficient money in as little time as possible and with as much fun as possible”.
But apart from your job, there are also many other parts of your life where you can save tons of wasted time – those will be touched as well and I am looking forward to your comments and suggestions.

Now that we have sufficient money and time at hand, the magic equation begins to work:

Money + Time = Freedom

Bringing us straight to “An idea what to do with your freedom”

one of the more simple ideas what to do with your time...but maybe not the worst!

Money and Time brought you freedom.

But what to do now with your new freedom?

This is an important thing to think about from the beginning! (And many people unconsciously shy away from freedom exactly because they don’t know what they should do with it)
Good thing is: There are many things to do in this world. But coming right out of the treadmill, many people need some time to find out what to do with themselves. I will have some suggestions…and I’m sure you will have even more that I will be happy learning about.
Let me say one thing already: In my view social ties and an open mind are very important! And there it comes back to time, as many people simple lack time to build their social ties and open their minds while still working in the treadmill…

Have a joyful day and see you later…at post #4

#2 Independence is easier than you think!

Remember that despite all we live in great times. Most of us enjoy levels of wealth an possession that our ancestors were not able to dream of! We have access to means of leisure and information that are fantastic compared to what was there 50 or even 20 years ago – let alone the thousands of years before. You can easily live a better, healthier, and more independent life today than a king did in the old ages.But why is it then that so many today are still stressed and unhappy and feel out of control of their lives?

Some reasons are:

Where do you want to go? (A beach in Bretagne, France)

  • We let others take too much control of our lives and do too much to please the wrong people
  • We dare too little and are much more anxious than necessary
  • We compare too much to others and spend too much money unnecessarily
  • We concentrate too much on being confirm and act by standards set from outside
  • We work too much and live too little

If you are one of the many people who somehow feel similar, it is time to start on the adventure of living your life today:

  • Put away anxiety; Take control of YOUR life, make yourself free from what others think
  • Find out what YOU want and live your life that way instead of living it the way OTHERS want you to live
  • Think about what is important for YOU and how much money you really need for this
  • Learn how to save lots of your money and to spend the rest more efficiently
  • Learn to enjoy the free things in life and to improve (downwards!) on your working hours and expenditures while improving upwards on your leisure time

I just belief it makes sense to spend some time in life thinking about the most important thing:

Your Happiness.

And I think we all can learn from others how to improve our happiness, because we all have different strenghts and weaknesses when it comes to this topic.

This is was this blog is for:
An exchange of ideas on independent living and happiness.
Comments and Guest posts are highly welcome, just let me know if you’d like to add a post!

See you at post #3 to set course and leave the harbour.

#1 Today is a good day to live!

How do I live a relaxed, financially independent and happy life without too much effort?
How can I work less and yet make more out of my money? Have more fun and be happier while getting rid of all that annoying stress and workload that keeps surrounding me?

This is my topic here.

But first, let me introduce myself:

well, thats not me, and not even my name patron, but of course I sympathise with this little fellow…

In short, Woodpecker is a very common guy. I would say a bit above average financially well off, not especially gifted but not untalented either, well educated and quite handsome (no, kidding, average also in this respect…). But no rich daddy, no elitist university, no lottery winner or something. One of what you would call typical middle-class in Germany.
I am around mid 30s, 2 kids (3 and ½ years old) and I live in Munich/Bavaria/Germany/Europe. (For those of you from outside Europe: Just put your thumb on the middle of my home-continent, and you are likely to hit Munich, town of beer, lederhosen and what not…)


wanna go skiing?!

Munich: A great town, but not Paris, not New York or Tokio. Just a town, a bit expensive unfortunately (for Germany at least – you guys from the really “big” towns would laugh at me probably here) but nicely located.
I work for a medium-sized unspectacular company, it’s not booming, but it’s not doing too bad either, I’m not unhappy with my salary but it’s far from Silicon Valley or London city wages.
So what about this boring guy then?

The thing about me is that I have a goal:

I want to find a way to live as much of my life as possible in a happy and fulfilling way. In a way I determine – without my bosses, a low bank-account, the state, the society and other annoying people interfering. And I am determined to do it now and here and not at some maybe-later-point-in-time when I am retired or old or found an oil-well in my garden or something.

You know what I am talking about – don’t you?!

I just want to be financially independent, have fun with my family, have freedom in time and space and be happy and relaxed. And I want to live without the stress of working, of justifying, of counting down the days to the next salary or holiday or something. The life I’m aiming at is a real and self-determined life! …and not the sad thing that so many people out there are living, often without the need to do so…

“This guy is crazy, that’s not possible. At least not for us poor ordinary people without loads of money in the background.”

Well, if you think so, let me proof you that you are wrong!
And if you don’t think so, join me as well and let me and others hear your comments and tell us how you found your personal freedom and happiness.

I work on this project since a decade now, and let me tell you:

It is possible to work less, to live without stress, happily, mentally and financially independent for much more people than one might think.

Maybe you are one of those without knowing yet!

I am proud to say that my family and me made quite some progress here already. It’s not perfect yet but the journey goes on! The point is just: you have to start controlling your life some day and stop letting other people or circumstances control you. And you have to get rid of those ties which might not be so tight in the end once you pull them a bit.

So sail out with me and join me with this blog and we will see how far we can get!

And don’t be suspicious: I’m not member of a strange sect or trying to sell you dubious financial products or something. 😉

See you at post #2, cheers,