Inspired Money podcast (panel interview)

[jacob]

I was part of a thing: https://www.youtube.com/live/jiEHWUIR5Yw

Rated for a general/mainstream audience. Interestingly, this was produced live (by an actual producer) with no preparation on my part.

[black_son_of_gray]

There's a point in the video, at [44:15] where the host asks @jacob:

Jacob--extreme fugality, living on $6,000 per person, how do you balance enjoying life versus saving?

Jacob responds:

The FIRE movement is all about money. It's the hammer that people have, and if all you have is the hammer, then the entire world is the nail. [...] It's very hard to get out of this mindset when you see everything in terms of how much you spend and how much something costs, or what you had to give up to optimize the budget on whatever you spend your money in. So the difference between FIRE and ERE is that ERE tends to add more tools to that toolbox. So we don't really look as much at what things cost and how we can best spend our money, but [rather] 'how can we learn these other skills that we somehow can creatively combine to find solutions outside the consumer economy'? And these are basically tools that our grandparents knew. It's not something that's difficult to learn, it's just not quick and easy. It takes time [...]

(I've excerpted from Jacob's full answer. It's worth watching the whole thing, I just didn't want to transcribe it all)

It was a fine answer, particularly since the recording was live and all that. I'm not posting this to grade/criticize anything, just to open discussion on the question itself. (I know we've had threads here before on how to answer these types of questions).

Nevertheless, I started thinking about how to frame answers to that question or questions like it, that all circle around the idea of 'low spending = deprivation'. The 'deprivation' question almost always has two components to it: 1) a relatively simple underlying assertion that low spending means less quality/enjoyment of life, and then 2) a flavor of... "so, then....[how/why/what?!]", which is essentially the sound of neuronal gears grinding together in question form. This sounds similar to the reaction Jacob describes of financial people when he brought up the mathematics of saving 70-85%, which involved assertions that it was impossible, then confusion/neuron grinding.

My first thought, immediately as the question was asked, but before Jacob gave his answer, was " 'My life is immensely enjoyable.' He should just say that!" And on some level, I think that is not a bad way to start an answer. It's an immediate contradiction of the underlying assertion, and it's a positive rather than defensive statement. The sneaky thing about the phrasing of the deprivation question is that its orientation immediately puts the answerer on the defensive, trying to "justify" their life satisfaction in dollar terms.

I think there may be a way to use the money-centric orientation/premise of the deprivation question as a way into the answer. If FIRE people are stuck in money-mode, it is probably most effective to appeal to them through Econ-101, Homer Simpson-level* logic. "Money can be exchanged for goods and services, right?" No doubt they'll agree. (Unless they argue just to argue, in which case the conversation wasn't going to be productive in the first place...) The logic then follows: "Well, skills can be exchanged for goods and services, too.** Services are just skills, and a lot of goods are just raw, cheaper goods that someone's skills have been applied to. So, for a huge amount of things that people spend money on, we can 'spend' skills on instead. Therefore, skill can substitute for most of the money that we spend. My life literally has most of the same components in it as most other middle class consumers. I eat with silverware, I have running water, I wear the kind of clothes I want and eat amazing food all the time.*** The difference is that the skills that I have developed mean that I don't have to spend money in order to achieve that. I've cut out the 'middle-man' that everyone else has to pay, and as a result, my spending is almost nothing compared to the typical consumer who has few skills." That last little bit (italicized) hopefully serves to shift the reference frame a bit without coming off as defensive, a kind of subtle twist from "I'm not cheap!" to "most suckers overpay!", with the idea that very few people--particularly the "optimized" FIRE crowd--want to be seen as overpaying or 'not getting a good deal'. This puts the defensive posture back on them: "So...why do you pay so much for the same things that I get for almost free?? I thought you were good with money?"

I think Jacob's phrasing in his answer was great for similar reasons: "These are basically tools that our grandparents knew. It's not something that's difficult to learn, it's just not quick and easy. It takes time..." I think there is a pretty strong, broad cultural understanding of basic practical skillsets that people a few generations ago had. So, that seems like a powerful understanding to appeal to. (Maybe that is changing for younger generations, whose parents are comparatively less skilled?) So then appealing to that helps to get the question-asker thinking about basic skills they don't have that clearly are possible to have (...because grandma/grandpa had them). Just on one side of the family, my grandfather built the house they lived in and my grandmother (among many other things) sewed all the clothes that her daughters wore as children.

Another distinction/framing that might be worth pointing out as part of an answer is that a lot of money is spent on convenience, not quality. So then that money spent doesn't necessarily improve quality of life in any substantial way****. This is yet another way to de-couple/dispute the assertion that "spending = life quality". An easily relatable "common knowledge" example is fast food, which is convenient but not particularly cheap or quality. If you have the skills to make a tasty, healthy, cheap, high-quality dinner in the same time it takes to sit in traffic and crawl through the drive-thru, then it's a no-brainer. Greater skills increase convenience without sacrificing quality.

Lastly, I can't help but think that 'systems'/'systems theory' should probably not be brought up in answers to this deprivation question--certainly not as the answer to the question. I'm saying this generally, not in response to Jacob's answer, which I thought was pretty good. This goes back to the two parts of the question that I mentioned at the beginning: 1) there is the false assertion (not a question), and then the 2) grinding mental gears (which is expressed as a question). In other words, though it may sound like it, the asker is probably not actually seeking the answer, but rather, a resolution to the mental conflict that the false assertion creates. It's probably more worthwhile to point out ways in which the assertion might be false than to try to "prove" something (i.e. a high quality of life) that the premise already considers impossible. Don't convince. Sow doubt!

Anyway, just some thoughts on the topic.

*It being the butt of a joke strongly suggests that most people 'get this', even if Simpsons writers tend to be highly educated.
**A job is a worker essentially selling their skills for money--another reinforcement of "skills=money"
***Maybe you don't do some of these things because you don't want to. That's fine, the point is to list some similarities to what they think of as key to their 'quality of life' and show that you have the same things in your life. The 'end' is the same--a high-quality life--but the 'means' to that end are different: skills rather than money.
****Someone arguing that they have to spend money on the 'convenient' solution because they are busy...is in some ways arguing that their quality of life is currently not high enough for them to take enough time to do the important things in life well. This of course depends on personal priorities. "That sounds like that sucks. I don't have that problem."

[jacob]

Another distinction/framing that might be worth pointing out as part of an answer is that a lot of money is spent on convenience, not quality.

Also, maybe emphasize that "consumers often don't know quality even if it bit them in the ass". IOW, consumers are played for suckers by professionals who just sell a "good enough" job to a client who doesn't know the difference. (Perhaps not much different that what they're pulling at their own jobs.)

One thing I do know is that showing consumers a simple trick like DIY laundry detergent or DIY thousand island dressing does NOT work. There's even a risk of blowback/backfiring. Too many still think they're better off earning and paying for it despite the $800/hr value generating rate. Too many don't want to give up their identity as a high-income earner or their belief that [other] professionals do a superior job simply because they're professionals.

[Frita]

Also, maybe emphasize that "consumers often don't know quality even if it bit them in the ass". IOW, consumers are played for suckers by professionals who just sell a "good enough" job to a client who doesn't know the difference.

And I wonder if time reference is an issue with the consumer (i.e., “I want this now and view it as disposable.”). From this point of view, they are buying quality as sustainability is not valued. “Good enough” (for now) may be all they want.

The strength of the podcast episode was giving the observer a bird’s eye view of something beyond just the mainstream FI movement. (@jacob is clearly the outlier.) I’d be curious if anyone new here was prompted by watching it.

[Western Red Cedar]

Nevertheless, I started thinking about how to frame answers to that question or questions like it, that all circle around the idea of 'low spending = deprivation'. The 'deprivation' question almost always has two components to it: 1) a relatively simple underlying assertion that low spending means less quality/enjoyment of life, and then 2) a flavor of... "so, then....[how/why/what?!]", which is essentially the sound of neuronal gears grinding together in question form. This sounds similar to the reaction Jacob describes of financial people when he brought up the mathematics of saving 70-85%, which involved assertions that it was impossible, then confusion/neuron grinding.

I have two basic thoughts on approaching the deprivation question.

1. When I talked to people about FI in the real world years ago who were concerned about frugality and deprivation, I simply told them that most of the things that I value and enjoy are free or very low cost. Spending time with friends and family, hiking, walking through my neighborhood or along the local river, playing my guitar, drinking coffee in the morning, reading, watching films, making art, backpacking, cooking, writing, gardening, meditation, naps, yoga, sleeping in, barbecues, watching sports, and lifting weights.

The list wasn't typically that long, but almost everyone groks that the most valuable things in life don't actually cost money. Painting a personal picture of all of the things I do to lead a rich, meaningful life with minimal costs was essentially a figurative mic drop. People immediately understood. It is easy to make some of that stuff expensive, but it isn't necessary and people know it.

Chris Mamula and Doc G, who were featured on the podcast, have talked and written about this quite a bit in the past. Almost everyone in the FIRE sphere understands it logically. It is just easy to get accustomed to a particular lifestyle when there isn't a strong incentive to change.

2. The biggest draw to ERE for me was that it appeared to open the door to a more interesting, creative and adventurous life. When talking to higher-spending FIRE folks, this is where the incentive to change comes in. If I valued travel and adventure, how would something like a pilgrimage on on the Santiago, volunteering at a French Vineyard, or a trek through the Dolomites compare to a month in Europe in hotels and hostels? What about crewing a Yacht bound for South America? Bicycle touring through the US? Backpacking the John Muir Trail?

Helping people understand that avoiding the typical consumer route can lead to a richer experience, with more connection and community, is part of the puzzle. Stories and examples help most people understand the concept.

[jacob]

Stories and examples help most people understand the concept.

This is where I'm personally at a disadvantage because my interests and activities, while free or low cost, are rather niche or unrelatable to most consumers. If you draw a Venn diagram with the overlap, consider that consumers' imagination generally include just travel/exotic places, restaurants, concerts, and children/family. If your interests don't overlap at least one of these, your stories and examples won't connect.

Having done very many things since I retired 15 years ago, I can draw a direct inverse correlation between how esoteric an activity is and how well it sells the average consumer on the idea of FIRE. It's basically Wheaton all over again. In order to inspire someone, one must do it from 1 level ahead. For consumers that's means picking from the aforementioned basket of "travel/exotic places, restaurants, concerts, and children/family". The average consumer is generally unable to comprehend why anyone would retire to spend their time volunteering on a farm, fixing electronics, building engines, or reading books about economics.

[Western Red Cedar]

I think the format was probably a little challenging in that you were sharing time with four other individuals. I got the impression that you were trying to describe the broader philosophy of ERE, which is difficult in a series of soundbites. The madfientist interview allowed you to go into more depth, and also had an interviewer who was quite familiar with systems theory and ERE.

I thought the description of your garden was actually a perfect example to help people understand ERE, and a good counterpoint to the "deprivation" question. This is basically what I'm talking about. It is a manifestation of systems theory that most regular people can grok. You can emphasize the cost-savings, higher quality nutrition, health, time in nature, mobility, vitamin d, independence from the industrial food system, relationships with neighbors (when giving away excess zucchinis ). Some consumers like restaurants for the status, but I think a lot of people think the food is better. Good quality produce is the first step to making outstanding food at home.

Having done very many things since I retired 15 years ago, I can draw a direct inverse correlation between how esoteric an activity is and how well it sells the average consumer on the idea of FIRE. It's basically Wheaton all over again. In order to inspire someone, one must do it from 1 level ahead. For consumers that's means picking from the aforementioned basket of "travel/exotic places, restaurants, concerts, and children/family". The average consumer is generally unable to comprehend why anyone would retire to spend their time volunteering on a farm, fixing electronics, building engines, or reading books about economics.

Also, keep in mind that you have a forum full of case studies if you think their stories or examples are more appealing to the average consumer. I'm sure anyone here would be honored to have a shootout from JLF in an interview. Many here find low/no-cost ways to hit on some of the more conventional values you mentioned - housesits, bike packing, walking across the US/Portugal/Spain, homesteading, crewing ships, circumnavigating the world on a sailboat, selling art, growing and selling mushrooms, hunting big game, fishing, relocating to other countries, brewing beer, building homesteads in the desert, working at Jazzfest in New Orleans - the list goes on and on.