The financial wisdom of Fight Club
“The first rule of Fight Club – We Do Not Talk About Fight Club.” Everyone who’s seen the movie remembers that. But what about something Tyler Durden, the anarchist extraordinaire, said very early on in the movie? It’s something profound that stuck with me from the second I saw it in the movie theater to this very day. And I think it should stick with you, too.
For those of you who haven’t seen Fight Club (please see it), or read the excellent Chuck Palahniuk book, I won’t put any major spoilers in this article. But to set the scene, at the beginning of the film Edward Norton’s character, Jack, loses everything he owns in an explosion at his home. The conversation that follows with Tyler Durden (Brad Pitt), a colorful free spirit he met on a plane prior to the incident, goes like this (excuse the language, it’s a direct lift from the screenplay):
JACK: There's always that. I don't know, it's just...when you buy furniture, you tell yourself: that's it, that's the last sofa I'm gonna need. No matter what else happens, I've got that sofa problem handled. I had it all. I had a stereo that was very decent, a wardrobe that was getting very respectable. I was so close to being complete.
TYLER: S**t, man, now it's all gone.
JACK: All gone.
TYLER: Do you know what a duvet it?
TYLER: It's a blanket, just a blanket. Now why guys like you and I know what a duvet is? Is this essential to our survival? In the hunter-gathered sense of the word? No. What are we then?
JACK: You know, consumers.
TYLER: Right. We're consumers. We're by-products of a lifestyle obsession. Murder, crime, poverty -- these things don't concern me. What concerns me is celebrity magazines, television with five hundred channels, some guy's name on my underwear. Rogaine, Viagra, Olestra.
TYLER: F**k Martha Stewart. Martha's polishes on the brass of the Titanic. It's all going down, man! So f**k off, with your sofa units and your green stripe patterns. I say never be complete. I say stop being perfect. I say let's evolve and let the chips fall where they may. But that's me, I could be wrong, maybe it's a terrible tragedy.
JACK: No, it's just stuff.
TYLER: Well, you did lose a lot of versatile solutions for a modern life.
JACK: F**k, you're right.
Tyler offers Jack a cigarette.
JACK: No, I don't smoke. My insurance will probably cover it, so...
Tyler stares at him
TYLER: The things you own, end up owning you.
Let me repeat that for dramatic effect; the things you own end up owning you.
The more I thought about that, the more it made perfect sense to me. It also made me think hard about the purchases I have made that have, in fact, ended up owning me.
The first is a no-brainer. My house owns me, no question. Even though I bought a home very much within my reach, my mortgage is still a substantial part of my monthly income. I figure, after taxes, I spend at least the first 10 days of every month just working to pay my mortgage. If I don’t pay it, we’re homeless, I face foreclosure and the risk of a huge black stain on my credit report.
Then there are the cars. Two of them. I don’t drive anything classy and super-expensive like a BMW or a Mercedes, but my humble VW Passat and my wife’s Pacifica still take another huge chunk of my salary. Again, defaulting on these loans means bad credit and, of course, no transportation.
We also have credit card payments, most of the bulk of those came from transferring my UK student loans to US credit cards (the exchange rates and transfer fees were killing me). I don’t feel as bad about those. But anything else we put on a credit card in the past, from a simple CD to a piece of furniture, is now owning me until I pay it off.
What’s the solution then?
In Fight Club, Tyler Durden took lack of ownership to the extreme. He didn’t work (other than his gross soap sideline), he lived in a house that had been abandoned, he had no real possesions and he bought nothing other than food and clothing (and, well, ammo). For most of us, owning nothing is not really an option.
But what we can do is make a determination between wants and needs. Most of us need a car, but no one needs a $70k BMW. That’s a want, and unless you throw down cash, that BMW will own a part of you for roughly 3 to 7 years.
You need a place to live. But do you need a 6-bedroom, 4-car garage, media center home in 5000 square feet of luxury living? That, once again, is a want. And unless you’re Bill Gates or Warren Buffett, you won’t be bringing that kind of cold, hard cash to the table. For most of us, that decision is a 15 to 30 year commitment. And in that time, the house is owning you.
Even if you’re just thinking about slapping a fancy meal or a new DVD onto a credit card, think again. If you really want it (no one needs either, they’re wants) then ask yourself if you can pay cash, or use the debit card. You don’t need to be paying anywhere from 6% to 26% interest on either of those things.
It’s a fact of life that at least 95% of us will end up being owned by the things we have. It’s unavoidable. But just how much they own us, and for how long, that’s a decision we can all make.
Thanks Chuck Palahniuk and David Fincher for a great, great film. (Available to buy at Amazon if you just HAVE to have it...or rent it free from your library.)