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A Nonconformist Guide to Personal Finance

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As pointed out in my post on avoiding the American Dream, conformity is expensive! And those dollars translate into hours. Full time workers here average 47 hours of work per week and take half as many vacation days as Europeans.

Maybe you’re tired of the work, the debt, and the stress that comes with following the same path as everyone else. Maybe you don’t want to give up your dreams for financial goals that don’t really make you happy.

So you’re ready to try a different approach to personal finance, but where do you start? Here are some basic nonconformist principles:

  • Overcome social pressures
  • Find new examples to follow
  • Learn what you really need
  • Ask deeper questions
  • Experiment

You can see these principles at work in the following examples of nonconformist approaches to financial matters. They’re not meant as advice, but as inspiration and food for thought. After all, as a nonconformist you have to choose you own path.

Who Needs (Formal) Education

Education is so valuable. But despite the social pressure to go to college, formal education is not always necessary.

Consider the 100 people found on just one list of entrepreneurs who succeeded without a college degree. Forbes and Business Insider even have lists of successful people who dropped out of high school, like billionaire Richard Branson and movie director Quentin Tarantino.

Of course such lists typically include only famous people who make millions of dollars. Many people without college degrees quietly enjoy a good life without the wealth or fame.

For example, I left high school at 16 to hitchhike around the United States, Canada and Mexico. I later got my diploma, but never received a college degree. I’m 53 now, and I’ve worked a full time job only a few months of my life. My wife and I own a home with no mortgage, have no other debt, and enjoy traveling and eating out regularly.

My path has included investing, starting small businesses, working dozens of temporary jobs, reading hundreds of how-to books, and carefully controlling expenses. To help you find your path here two relevant posts:

Being a nonconformist doesn’t mean simply doing the opposite of what others suggest. Going to college might make sense (it usually does). But if you do go you can approach it differently from most students. Here are some possibilities:

Who Needs a Job?

Yes, jobs are a convenient way to make some money, but certainly not the only way. For example, college dropout Mike Henkel started investing in real estate with $10,000 at age 20. Four years later he had rental properties worth $4 million.

Henkel may not need a job again in his life. He did save that $10,000 from summer jobs, but using jobs as a temporary tool is a classic nonconformist approach.

People who think outside of the box also look beyond the paycheck. Jobs can be profitable in other ways, like as necessary training to start a business. For more on that read my post: 15 Ways to Use a Job to Make Money.

Despite trying out a few dozen of them, I still dislike jobs. I’ve chosen instead to have numerous sources of income and to control expenses. And although jobs are probably in my future, they will be temporary.

How do you survive (or thrive) without a job, or with only part-time or temporary employment? Here are a few relevant posts that can help:

To avoid too many jobs you might invest, start a business, or join the Peace Corps. You might live self-sufficiently off the grid, or get rich young and then quit working. The possibilities are endless.

If you do have to keep your job, at least for now, make it into something better using the tips in this post: You Hate Your Job? Here Are 15 Things to Try Before You Quit Your Job.

Then, if you’re ready to leave that job behind, do it the right way. For help with that, read this post: How To Quit Your Job.

Who Needs Marriage?

Okay, this one will make me unpopular, but then nonconformists routinely give up popularity for more valuable things. So… my marriage 16 years ago was just an affordable way for the love of my life to legally stay in the U.S. with me. There are financial advantages to marriage.

But there are also disadvantages. One example: A serious illness can financially wipe you both out if you’re married; as an unmarried couple one of you can preserve your assets to help care for the other.

To explore the financial aspects of staying single, living as a couple, or being married, read this: Should You Get Married? Financial Factors To Keep In Mind

If you do marry there are the questions of how to go about it. You’ll probably be pressured to conform to various expensive traditions. The choice to skip those in favor of a better future is yours to make.

For example, the average wedding costs $26,720 in the U.S. That’s a lot of money! Don’t you or your spouse have any goals (like traveling, helping people in need, getting educated, climbing Everest) that are more important than such a show of extravagance?

And what about the engagement ring? Will you follow the “three months’ salary” rule invented by the De Beers diamond cartel? (It started out at one month.)

Here’s an alternative: Skip the $8,000 diamond ring. Get an identical one with a fake stone for $200. Then prove your love with a ceremony in which you burn $600 in cash. You’ll save 90%, have a great wedding story, and nobody will be able to tell the ring is cheap anyhow.

Who Needs Children?

Really… do we all need to have kids?

No.

Science finds no increase in happiness from having children. But there is a large increase in expenses. Government data predicts an average cost of $233,610 to raise a child.

There’s a lot of social pressure to have kids. You can diffuse some of it by asking people to refer to you as “childfree” instead of “childless,” and making it clear that this is your choice. Don’t offer financial arguments — they won’t win you any sympathy.

Not sure if you want children? Wait. Spend a week with nieces and/or nephews to see how you like it. Think carefully about how your life will change if you have children, and about what you’ll have to give up (don’t pretend there won’t be huge sacrifices).

Even if you’re sure you want kids, wait. Waiting until you’re financially prepared can be better for you and your child.

Who Needs a House?

When we married in 2001 my wife and I lived in a seven-by-seven-foot bedroom in a mobile home with two other people. That may sound sad, but I did own the property free-and-clear, and collected rent from the other two residents.

That’s how we financed our first cross-country multi-month road trip. Along the way we bought a nice house in Montana for cash — the first of many houses and condos we’ve owned. Since then we’ve also lived in another mobile, my parents’ basement, our van (for a month), four apartments, and one half of a duplex we owned.

Prior to getting married I also lived in a cabin, as a live-in babysitter, and in a shed (so I could get more rent out of the rooms in my home).

There are advantages and disadvantages to every sort of housing, but we mostly look for low expenses. There are too many fun things we want to do, and working to support a big house is not one of them.

Speaking of ever-bigger houses (and mortgages) here are a few depressing numbers:

Ouch! Our average monthly housing costs are under $400, including maintenance, HOA dues, utilities, everything.

I won’t get into all the problems with the real estate industry myth that you should “buy as much house as you can afford.” You might be happy with a big house, but like Daniel Suelo, you might also be happy living for free in a cave for 17 years.

Or you could be like that guy who lived in his office for more than a year. Think of what you could do with the money saved by not paying rent. A nonconformist looks for advantages in temporary solutions.

Read this for some other possibilities: 40 Cheap Housing Options.

More Nonconformist Financial Choices

Here are some more out-of-the-box ways to think about financial matters, including a few mental experiments aimed at changing your perspective.

The Price in Time – Prices are quoted in dollars, but it takes time to earn that money. Why not calculate the time you pay for things. Figure your hourly earnings after taxes and work-related expenses, and mentally put hour-price tags on everything. It will give you a perspective that will probably change your purchase decisions.

The Price of Time – I can buy an hour for $20. In other words, if I make an extra $200 from a bank bonus, I can work 10 hours less (since I earn about $20/hour) and use those hours how I like. While this is more workable for freelancers like me, if you’ve ever said “I wish I had more time for…” (kids, reading, whatever), you should know that ultimately, if you use it the right way, money buys time.

Cars – My wife and I have gone without a car a couple times, and even some businessmen in L.A. go carless to save money and time. Having no car can also be a way to save money to buy a better car, and for cash (never borrow for a car).

Retirement – So many people buy into the idea of retirement at a certain age that it seems normal. But some people can happily work until 90, and others are unable at 40. Work if you like, take mini-retirements throughout life (I’ve done this), and prepare for a time when you can’t work — which can happen at any age.

Budgeting – You might think if you budget carefully you’ll be fine… until you lose your income. A different approach is to work on reducing regular expenses (rent, utilities, debt payments, etc.). That way you can enjoy eating out or going to movies, knowing these activities can be cut out the moment you lose any income, leaving you with only minimal core expenses.

Second Homes – You have to learn to crunch the numbers to avoid financial conformity. And if you do crunch the numbers you’ll probably find the cost of a vacation home far exceeds the cost of staying in a nice hotel that someone else cleans for you. If the underlying desire is to have a break from work and home, why pay so much just to add the stress and work of caring for yet another home?

Health Insurance – If you have no assets you have little to lose from going without insurance, other than your high credit score. If you do have something to lose you might look into the alternatives to traditional health insurance.

Car InsuranceExperts say drop collision coverage when your car doesn’t have much value. But at almost any point, if you can afford the loss from an accident, you might be better off just putting that extra premium money aside. Use that to pay for damage if it happens or for anything else you want if it doesn’t.

Life Insurance – You want to provide for people if you die, but life insurance often isn’t worth the cost. If you’re single, there’s no reason to have it. If you’re married but your wife has a good income, and she doesn’t need yours, life insurance is just gambling, it’s a bet that she wins only if you die.

Holidays – Surveys find most people don’t like their Christmas gifts. What a waste of money! Glad I haven’t participated in this or most other holidays for decades. The choice is yours. If you do opt out, people might forgive your nonconformity more if it’s a principled stand, so email everyone you know a link to The Case Against Buying Christmas Presents.

Everything Else – Ask deeper questions and you might discover better, nonconformist ways to arrange your personal finances. For example, when you want something don’t stop with “How can I get it?” Ask what need it fulfills. Ask if there is a better (and cheaper) way to fulfill that underlying need. Keep asking why and keep digging deeper.

If you have your own nonconformist ways of handling personal finances, tell us about them below… and keep on frugaling!

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