Maybe that's not something that's terribly fulfilling to you, but if one takes joy in the process itself then the act of saving a dollar on icecream can bring both more hedonic and eudaimonic pleasure than having the icecream would have, and pay off materially. Especially in the very-long term.
In your head it's Ebeneezer Scrooge, but it can just as well look like ...err, Scrooge McDuck maybe? I struggle to really find a good example for what I'm talking about. But if you make a challenge to yourself, being frugal can be very fun and fulfilling, even moment-to-moment.
You can see it from other aspects than just money. For example, renting instead of owning frees up time and gives you much more predictable expenses. From not needing to fix the house to being able to be unemployed with predictable monthly costs.
Home ownership in the west is seen as some sort of pinnacle and goal because of the perceived security it provides, but its also possible to see it as golden handcuffs that force you to stay at safe, predictable jobs for 20 years.
It's a good point that renting often sucks, especially renting from private individuals. I wish EU countries were more focused on civilising renting market instead of just home ownership.
exactly the way I think. Home ownership is what you do when you act on autopilot.
If you think this through, it is essentially spending more money and more time on something very materialistic that doesn't matter that much.
Renting allows you to spend more time and resources doing things that really matter.
I think most people would come to that same conclusion if they really think about this from first principle, but as a society we have been pushed and molded to believe that home ownership is the pinnacle of success and personal accomplishment somehow. I have been attacked left and right for even suggesting that owning a home is maybe not as big of a deal for personal happiness as we think. In the west and in the US it has been pushed as a core component of people's identities.
Renting is fine but it comes with a bunch of caveats.
You can bounce around the place, maybe live in a much nicer place than you could afford to buy, more easily move cities, etc. In my twenties this was a no brainer tradeoff to me, plus a lot of people were in negative equity due to the financial crash.
But you can also be forced to move prematurely. That nice place isn't your nice place, it's some other person's nice place, and maybe someday they want their brother or aunt to use it instead of you.
Depending on your relative financial capability, maybe there won't be anywhere within your means to move to in the same area. Maybe you'll treat this as a grand adventure every time it happens, but as you get older maybe you'll want to actually live near your friends, family, favourite restaurants, cafes, parks, Padel courts, etc.
At some point in your life you may not be earning money for a while (illness, career break, whatever) and certainly when you get older your finances may become more precarious – this is where owning tends to have more power than renting.
I'm not sorry I didn't buy a house or apartment in my twenties, but when I eventually bought in my thirties it was a relief not to have to care any more whether some landlord would decide to "alter the deal" at any point.
>exactly the way I think. Home ownership is what you do when you act on autopilot.
>If you think this through, it is essentially spending more money and more time on something very materialistic that doesn't matter that much.
>Renting allows you to spend more time and resources doing things that really matter.
Imo this is the classic argument of someone who doesn't own a home. I'm not sure how many issues you run into renting, but in home ownership they're relatively rare. And many of the issues are resolved the same way your landlord will resolve them, just paying someone to fix it (this is priced into your rent of course).
It just reminds me of someone who said they were renting and when I asked why they mentioned not wanting to cut the grass. A task that takes 20 minutes twice a month 6 months out of the year.
Yeah... I have had a hard time with my friends on this topic. In general, in my country (Sweden), the system is kicking the can down the road. You have 65% of the people in the country owning, with an common housing mortgage at 85% of the purchasing price. Avgift(you pay a rent equivalent to your apt association)+interest+amortization requirement make up around 30-50% of the average income.
Average loan amortization rate is 25 years, with a 35 year roof.
Govt has approved 90% loans at the end of this year, meaning you will only need 10% as down-payment when you take a multi-million SEK loan, which will achieve nothing except for continued price growth and larger loans, and push up the average amortization rate closer to the roof.
The banks dont care, they would be fine with a 0% down payment rate, as they are immediately selling these loans and the associated risk to the pension funds.
Every year, you have new political patches to make the pyramid scheme palpable. Last year they had that homeowners can get services on their homes subsidized by 66% by the govt. The year before that they had that you can write off your taxes using loans as "economic losses". The year before that they capped the property tax, etc.
You can as a housing owner (in an association) build your own in-house electricity distribution, essentially letting the renters pay for all the government electricity infrastructure. You can negotiate lower costs for internet, water, power in bulk with distributors.
As you can guess, since the homeowners with loans are the majority, its political suicide by any political party to not kick the can down the road. So no action is taken.
When I talk about this with my friends, they have not thought about this. Honestly, I would be more happy if they said "Oh yeah, I know, I believe that there is such a majority of people with loans that the government will have to bail us out, or increase inflation to eat the loans", but there isn't.
Even if we ignored the inevitable crash, and looked at the situation as-is in the current moment with all of the patches to improve house-owning, its STILL cheaper to rent. Its mind-boggling.
So It's really sad to think about the value of time or things? Don't you implicitly do that every time you chose an activity over another? When you chose a job over another? when you chose to spend your time with a friend or with your wife?
This kind of opportunity cost thinking can lead to things like overwork or ignoring your family. It makes sense up to a certain point but viewing your whole life through an overly simplistic heuristic can be a negative thing.
I literally use opportunity cost as a reason to spend MORE time with my family. It is not about money strictly speaking but it is about maximizing what matters to you.
It's not but it's also not about dumping money into a sink or instant consumption.
You can live a fulfilling life while making good financial decisions. As money gives you freedom and more choices I would argue it's easier to live fulfilling life this way.
Thanks for clarifying. Being mindful of opportunity cost allows people to retire early, to spend more time with their loved ones, do better financial decisions.
I have seen too many of my loved ones work until their 70s because they didn't think about those concepts enough. That is what is sad.
Don't forget though there are things you won't be able to do at 50 even if you're retired. I'd hate to think of someone being a virgin hermit finally coming out the shell at 50 thinking the world is their oyster now. Some things you have to do when you are young.
My experience is that most decisions aren't of the type. It's not that you're choosing fun at 20 or longer fun at 50.
Investing or not. Renting a cheaper place for a while or buying a bigger house right now. A lot of the time you will get more money and more fun if you do it right.
Probably far fewer things than you think, though, as long as you're healthy. You can still have love affairs, travel the world, go to festivals, climb mountains, learn to dance well into your 70s or even 80s, as long as you are healthy. Sure, you might be climbing a small mountain instead of Everest, but small mountains are beautiful too.
Health in old age is something that you invest in, much the same as wealth. Of course you can suffer an accident, or lose your investments from bad luck. But in both cases you're guaranteed bad results if you don't put the effort consistently and starting when you're younger.
For health, this means making exercise, good sleep, and good diet a part of your daily routine. Much like investments, you can go as deep on that as you like, but if you start early all you need is basic knowledge.
