Simplicity and being cheap
People might look at how I spend money and say I'm cheap or a tightwad. If they do, though, they're missing the point. The fact is, I'm much more interested in simplicity than I am in saving money. In many cases, it works out about the same: The simple choice is often frugal. The cheapest choice, though, is often not the simple one.
I advocate frugality on the grounds that it offers freedom. If you spend less, you don't have to earn as much, which gives you more choices as to how you earn your money. You can also save more, which means that you can accumulate capital--and having capital adds to your freedom in several ways.
When you think about it, though, simplicity also offers freedom. The less stuff you own, the less stuff you need to store, insure, maintain, and keep track of. The less of your time is committed to keeping your complex life running smoothly, the more is available for whatever you want to do--and to my mind, that's the very definition of freedom.
I keep my investments simple. I don't own any municipal bonds, I'm not the beneficiary of any trusts, I'm not in any limited partnerships, I don't trade options. There's nothing wrong with any of those investments--they offer tax advantages or let you hedge your other investments, protecting your upside while limiting your downside risk. But they're not simple. They all require careful research before you buy them, they all take extra work at tax time, and several of them need to be monitored on an on-going basis, because they have things like expiration dates attached.
My money is in a diversified portfolio of low-cost mutual funds, together with a few stocks I like, some Treasury bonds, a bank CD, plus an emergency fund with some cash in it. I suspect that the total return will match the total return of a much more complex portfolio--but even if it doesn't, whatever I might lose in return I more than make up for in simplicity.
I rent, rather than owning a house. This is the frugal choice. (I don't have to pay to maintain or insure the structure, plus the heat, water, sewer, garbage, and cable service are included in my rent.) But it's also the simple choice--I don't have to call electricians, plumbers, or handypersons. I also don't have to spend my time on home maintenance. I don't have to mow my lawn. I do give up some privacy and some control, but I make it back in simplicity.
Of course, sometimes, the complexity is part of the goal.
- A garden is more complex than a lawn. The fresh vegetables are nice, but I think most people who grow gardens do it because they enjoy the planning and digging and harvesting.
- Sewing your own clothing is more complex than buying ready-made. Well-made items that fit and match your style are nice, but I think most people who sew do it because they enjoy working with fabric.
- Keeping a pet purely complicates your life. People say they keep pets for the companionship, but they don't mean that there's an exchange--the owner provides food, water, care, and attention and the pet repays them with companionship. Rather, the time and attention that you lavish on a pet is what the companionship is made of.
- And, of course, nothing adds complexity to your life the way a new intimate relationship does, and here, too, the rewards are all wrapped up in the complexity.
To me, this is the point of a simple life. The less time and attention I spend managing the dull, tedious, stressful, or unpleasant complexities of my life, the more time and attention I have available for the wonderful and rewarding complexities.