Most of us who have financially struggled can testify that we struggled not because we did not have enough things but maybe because we had too much. I remember one of my biggest financial struggles was caused by owning and being attached to too many things.
I wanted the dream that I was sold growing up, the dream of having stuff, everything I could imagine I wanted to own. It did not bring me happiness or fulfillment, instead it brought me debt. One could argue and say it was not the stuff that brought me debt but rather my lack of ability to manage my finances and that would be true. The question becomes then Why Did I fail to mange my finances?
There are many answers to that question that match all of our different situations. My answer is that I was always wanting. My problems slowly evaporated the more I adopted a simpler lifestyle especially when it comes to owning stuff. Today I am going to discuss how minimalism and investing has resulted in me being more financially free but owning a lot more stuff. Lets get into it...
What is minimalism?
The concept of minimalism came from the art philosophy of using less elements in the design, styling and creation of art, music, architecture etc. However the philosophy has expanded beyond art. It is now a lifestyle philosophy. A philosophy about getting rid of excess stuff and living life based on experiences rather than worldly possessions.
What is excess stuff?
Everyone has a different definition for this. My definition is Excess stuff is more than you need. So many of us have more things than we need. This includes cars, houses, food, clothes etc. How do you know when you have more than you need? It's a simple test of can you use it all at the same time and maintain it as well? then odds are its more than you need.
We have all seen people struggle to maintain two cars (payments and mechanical), struggle to pay for and maintain their property, struggle with choosing clothes in the morning, struggle to keep excess weight off because they eat too much. Hack, some of us have been all forms of having too much. These are just a few examples, there are plenty more. Deep down inside we can all ask ourselves "Do I really need this?". Most times the answer is no.
We use money to buy stuff and because of that the more stuff we want the more money we waste. Debt is then soon to follow as our wanting exceeds our financial abilities. This is why peoples debts always increase the more money they earn. Every pay check increase results in them getting more stuff. A sad reality that affects many of us. The financial term for this is lifestyle Inflation/creep because it creeps up slowly on your finances.
So what's the solution?
The solution is simple but difficult. It requires us to go against our conditioning about spending habits. We also have to let go of concepts that make us believe that having more stuff makes our lives more meaningful. This is very difficult because most of us measure our self-worth by the things we have. This is all conditioning from years of tv ads and now social media.
So the solution is... let it all go.
How I saved my finances by letting it all go?
I have written a few times about my financial challenges. But for those who are reading for the first time here is a summary:
I had R30 000 credit card debt, R2700 in personal loan debt, owed Telkom R4000 and had other fees from somewhere I do not know of R1200 on my FNB Bank account. You could say I was not drowning from the figures. However on top of the debt I had lost my job and had obligations.. rent, insurances, internet/data, food and much more. In my attempt to solve my problems I moved out of my rental apartment and instead bought a place in hopes that I could rent it out if I do not get a job. My prediction came true, I could not find a job so I tried to start my own business. This meant I started relying a lot on my miniscule savings. Eventually I was about to be left with no money when I decided to move back home and rent out my place. Lol, that also did not work. The rental that I could charge could not even cover the bond completely and the levies plus municipal fees just made it worse. So I was in a dire situation. How did I get out?
The first thing I did was to stop making it worse. I had to stop wanting things and focus on paying back my debts. This meant slightly pausing many plans. Any odd job I got went to paying off my debts. I bought no new clothes, no new cellphone(I used my 5 year old Samsung J5, which I still have), I eliminated all insurance contracts I did not need(which was all of them except Home Owners). I did not go out to restaurants, I did not take on any new financial projects. I basically counted what I needed, kept it and sold everything and did not buy anything new. I re-designed my life using minimalistic principles of having no excess stuff. I did this because I realized the biggest cost of all the stuff I wanted and had was the cost of ownership.
After a long time I eventually managed to crawl out of my debts but I still had bond repayments. This is where I am now, 3 years after paying off my debts and stuck with bond and levy payments.
I am no longer financially struggling however my eyes have been opened to a new reality. That reality is I do not need to own even a property to be complete and that I could use minimalism principles to redesign my life and business even further.
So what am I doing?
I have put the property up for sale. It actually feels good to let go. Soon I will be free of the responsibility of just always attending to the needs of the property plus the administrative costs. The biggest cost though is the emotional one which I will no longer have to pay. I do not need the property as I plan to get back to travelling full time once the pandemic blows over. I will still own things and I will share with you how I am doing that a little later in the article.
So what things do I own and use?
Here is a list of things I own... (and plan to be the only things I own going forward)
Electronic Tools:
1. Laptop
2. Mobile Phone
3. Headphones/Earphones
4. Vlogging Camera
5. Vlogging Microphone
6. Tripod
7. Power Bank
Clothes:
1. Fourteen T-Shirts
2. Seven Shorts
3. Five long-sleeve shirts
4. Three jersey's/sweaters
5. Two Full Suites
6. Four pairs of slippers
7. Two pairs of sneakers
8. One running shoe
9. One pair formal shoes
Stuff:
1. Backpack Kit
2. Toiletry set
That is it. I do not own anything more than that. It's all I need. But Omega, Don't You need to own stuff when you are rich?? Nope, the secret is to focus on your net worth and unburden yourself from the shackles of direct ownership. The key thing financially free and wealthy people focus on is their Net worth. It has has not always been like this. There was a time when directly owning stuff made sense, however the cost of ownership of stuff has risen over the years.
But how then do you live, travel, eat and enjoy life without owning a car, house or kitchen?
Simple.. I pay for access and discard it when I longer need it. This is the key, access to things is what you truly need, not owning them. I care about having money and growing money, so having things I own that I have to pay the cost of ownership for does me no good. I pay for access and keep my money. How is this possible? Let me list a few things I use..
How do I travel without a car?
For flights I use Flapp to book flights and buses. For daily commutes I use Uber and since I run an online business I do not need to commute much.
Where do you live without an apartment or house?
I use AirBnB, Homii and Curiosity. All offer great long-term(30 day plus) services. This means that I can pay up front for the usage(no debt) and move out when I am done. No obligations and no extra costs like utilities. I can also go home (to my mothers) when I need to. This keeps me flexible and able to move to multiple cities when I want to.
I have also applied the same principles to my business. I have had an office since 2019.
The office had furniture for reception area, boardroom, my private office, kitchen and seating area. All of this costs money to keep and maintain. The office itself costs R13 120 per month to rent.
In March this year I decided to untangle myself from the costs and responsibilities of having an office. So I cancelled the lease and lent out the furniture to another company. Now I am more at peace, I do not have to worry about rent, security, cleaning up, electricity etc. I now run Money Mondays and the Insurance Brokerage totally online.
But What do I do when I need an office?
Simple, I started using co-working spaces. I pay for the day or week and I am sure at some point I will pay for the month. The thing I am happy about is that I get to use a hot-desk or private office whenever I need it. The best thing is that I am not responsible for it. I enjoy the access without owning it. So on my mobile device I have the Regus Business Centre app.
Regus has office spaces in most major cities in South Africa and the world. So when I plan my trips to a different city if I know I will need office space I go onto the app and pay for the time I need, just like AirBnB but for offices. Great huh!? That means I can still meet clients and get to socialize in a business environment when I want to. This is more in line with my vision and how I want to work.
These principles also apply to business opportunities..
I use to be the type that took almost every opportunity if it promised money, especially a fast and large buck. Needless to say most of these opportunities would either waste my time or money and never work out. So I have made it a point to not take on any excess projects , especially those that do not align with my goals. I have been saying NO to a lot of opportunities lately. Yes, sometimes I am afraid of missing out on the life changing deal but I have learned there is no such thing when your focus is scattered. I have developed the skill of telling the difference between an opportunity and a distraction, most things are distractions. Learn to see that and you will start to work on the most important thing.. YOU.
So what is the secret?
I am hoping you can see from what I have written so far that the most important thing is having access but no obligations/responsibility. You do not want to pay the cost of ownership but rather use it and leave it when you're done. Doing this however does not prevent you from building an asset base.. lets get into that now..
How do I now own more stuff as a minimalist?
I use the technology available these days... let me explain..
Through investing in stocks and public market assets I am able to own a diverse list of assets. These span from property, banks, online stores, grocery chains, restaurants, car dealerships, media companies, manufacturers etc. There is too many to count. This is how I own a lot more stuff. I buy assets online and have better minds than mine manage them. This frees me to do the things I want to do and focus on things I want to. I even now own a portion of a property in Boksburg through Easy Properties and once I get the little profit from the sale of my apartment I am investing the money in a few other Easy Properties offerings and adding to my global REIT portfolio as well. You no longer need to buy, own and manage your own assets anymore. So your capital and net worth can grow without ploughing your efforts into former conventional ways. The outcome is peace and owning less stuff on you but more stuff owned digitally. The great part is that most services I use I own shares of. The long term growth of the value of the shares can potentially offset my usage costs and that's awesome.
The whole world is now open for us to own at the lowest cost ever seen in human history. Why not take advantage of that?
What about when you want to start a family?
I am still young so that's a bit far of in my plans, however when I do "settle down" and start a family I will simply liquidate some assets and buy a property cash. Another option I could use is going into traditional renting and use income from my properties/assets to pay my rent. Anything is possible. The goal is not to simply just follow the standard approach. There are options. Explore them.
My message summarized in a few sentences...
You do not need to directly own stuff and incur debt. You can instead own things through digital platforms and free your finances and yourself from unnecessary burdens. This will leave you with energy, time and money to focus on things you love doing.
Final Thoughts..
My final thoughts are to tell you that this is just one way to approach life and money. There are plenty others. Minimalism is a philosophy that not everybody can adopt and that is okay. We live in a limitless world with plenty of philosophies to choose from. The most important thing is that whatever you choose to follow, make sure it enriches your life, offers peace and contentment. I hope I never go back to that unhappy self full of excess stuff and debt. I hope you don't become that person too. :-)
happy investing
- Omega
Remember: Opinions expressed in this article do not and never will constitute financial advice. Every persons financial situation is different, I recommend you speak to a financial adviser about yours.
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