Saturday 20 October 2012

Does frugal living cause reclusive tendencies and limit career opportunities?

I started down the road to early retirement in 2007, with a step change in my attempts starting in 2009 when I also started this blog to hold myself accountable.  As detailed in the link above, one of the key methods I have chosen to help me reach early retirement is to move to a more frugal lifestyle.  This frugal lifestyle means I need less to live on per month which then has the knock on benefit of meaning that I can save more per month.  This then gives a further knock on benefit that I need a smaller Retirement Investing Today Low Charge Portfolio to retire on because I spend less per month.

My move to frugality did not happen overnight and was possible with two key direction changes.  The first was to get more value from the money I was currently earning.  Some of the techniques I have used (and continue to use) include:
  • Achieve the lowest price grocery bill possible whilst satisfying my taste buds;-    Ensure I am on the lowest cost tariffs for electricity, gas, broadband and mobile phone;
  • Wait until shoes and clothes wear out rather than become unfashionable;
  • Stop everyday little treats that really made no impact on the lifestyle I want to lead;
  • Cut back on alcohol which also means less regular nights out (this also had a very noticeable effect on both my health and the sharpness of my mind);
  • Generally shunning consumerism; and
  • Before buying something always ask myself will this make a difference to my life 3 months from today.  This means I own very few gadgets.

The second direction change I made was to not increase my standard of living as I achieved pay increases.  Instead that money is saved.  Some of the techniques I have used to achieve these pay rises include:

  • Always do the job that is asked first and then ask for the money that job deserves once you are doing the job;
  • Do whatever is required to get the job done.  If the floor needs sweeping then sweep the floor even if it’s “3 pay grades below you”; and
  • Use a phrase I was told many years ago – success is only 1% inspiration but 99% perspiration.  I am not the sharpest knife in the drawer but I make up for it by working exceptionally hard.

So far this journey has been a positive experience for me (I have particularly seen a massive improvement in my direct family life) however just recently I have started to really notice the possible “negatives” of this approach.  The first centres on reclusiveness.   The vast majority of my friends and certainly my indirect family are still from my pre-2007 days.  This means that over time a big shift between our once reasonably common values and beliefs has occurred.  Noticeable differences include:
  • By having less nights out I see them less often so am not current.  This is now a noticeable spiral where over the years the gaps between contact get greater and greater.  I have tried shifting to nights in or “picnics in the park” which have not yet become a regular feature on the social calendar.
  • Every time we do get together I have less in common.  They want to talk about the bigger place they are looking to move in to, what great holiday they are planning this year, their new Apple iPhone 5 or new iPad.  These no longer hold a great deal of interest for me.  I have tried talking to them about my new lifestyle choice (maybe not as candidly as I write on this blog) which is always received with a fairly uninterested response resulting in the conversation quickly drifting back to gadgets.

At the same time I have found it very difficult to find “new” friends with common interests to my new self (it really is amazing once you have shunned consumerism to see how much it dominates people’s lives).  They really do seem to be few and far between.  Maybe I need to start a Retirement Investing Today Social Club?  What this has meant is that I now focus more on my direct family and not a lot else.  My “fear” is that I am becoming a recluse.

The second possible “negative” is my career.  Since starting work, by following my simple approach above, I have seen the odd promotion and with it a real inflation adjusted salary increase of around 300%.  As these promotions have occurred my day to day contacts and colleagues have changed and because their standard of living matches the salary they receive today I am now starting (if I’m not there already) to be seen as very obviously different.  Some of the obvious things I see (and hence assume they see) are:
  • While my clothes are clean and pressed neatly they are a little more worn and not quite as fashionable as my peers;
  • When discussing what we are doing on the weekend my response is very different to theirs; and
  • I can’t describe how to connect my new electronic gadget to the cloud.

So far I don’t believe this has limited my career however as each year passes the gap between my colleagues grows.  I’m now starting to wonder if because I am now obviously different if I am limiting my career opportunities by continuing to follow my basic rules.  This is where I arrive at a Catch 22.  If I continue to follow down the current path I likely achieve retirement (work becomes optional not necessarily stopping work) in 3 and a bit years however that potentially comes with accepting that my career is now at its peak and could even go backwards.  The other path is to ramp my standard of living (maybe not all the way to my colleagues but at least far enough so that I am not so obviously different) to keep further career development possible which then has the knock on effect of pushing retirement out many years.   As a person who is still only in his late 30’s the path I choose is crucial because I still have a long way to go in the journey of life.  For now I’m going to stay with the retire in 3 and bit years.

As always do your own research.


  1. This is an excellent post and i think something that represents the feelings of anyone who has chosen to opt-out of 'normal' levels of spending and consumerism.

    It is really easy to begin feeling a little isolated from everyone else when your interests start to change. I guess this is part of the process of growing up, when you tend to become your own person and the friends you used to easily associate with, start to become more distant.

    A number of my friends still spend a large amount of their time and money on big nights out, new clothes or other material items; but cannot (and may not ever be able to) afford their own home or take any sot of retirement. Whilst that is a lifestyle choice, it does begin to set you apart.

    I think it is great that you are trying to steer your social group towards cheaper ways of having get-togethers though and by setting an example people may begin to see the light and start to follow.

    it's also true what you say about work. Some people come to work every day looking a million dollars - crisp, new white shirts and all the latest gadg.

    I'm a consultant, so i feel the need to keep up a smart appearance, although i'm badly in need of some new shirts as mine are beginning to look and feel a bit worn. This is probably more due to a natural aversion to shopping (can't stand it) than being too frugal, but investment in appearance is important, because so many people judge you by it.

    However it sounds like you have got the right attitude towards your work (give 110% and be the best at what you do), so i don't think you need to change your values just to please others. In fact they probably have quite a bit of respect for a contrarian attitude.

    quite a few of the people i have worked with prefer to do sport, rather than drinking and use squash or running as a way to network instead.

    I guess the non-materialistic road can be a lonely one, but it is worth remembering the end goal and that can only be good :)

    1. Hi Donal

      I'm glad I'm not the only one who is seeing similar issues. I'm with you on the shopping - I also really can't stand it and really struggle to understand the attraction when we have a world full of natural beauty and interest.


  2. This rather reminds me of an article I read in the FT magazine about the social exclusion of self-declared atheists in the USA :)


    There are no barriers to being successful in a career from being miserly, so you should be fine there.

    In your personal life you either need to modify your behavior a bit or find some new friends

    1. Hi Anonymous

      This blog has enough trouble making sense of the path to early retirement, the markets and the economics of the world. I'm therefore not even going to try and make sense of religion (or lack of it) here :-)

      Your statement that "There are no barriers to being successful in a career from being miserly" seems a confident statement. I'm not so sure anymore. In my current line of work networking and positive bias also seem important. I'm clearly starting to show myself as a contrarian and so I'm not quite as confident as yourself.


    2. Some role models for you:

      Hetty Green (1834 - 1916) was the richest American woman who ever lived, yet her name became a byword for obsessive miserliness. On her 21st birthday, she cleaned the candles from her cake, returning them unused to the shop for a refund. She had a hernia but refused to have it operated on because the cost of the procedure was $150. She lived in grungy flats, moving frequently so the tax man could not find her, and she never used heaters or hot water.

      Franklin Roosevelt (1882 - 1945) was a tight-fisted employer who mooched money off his valet to put in the collection plate on Sundays.

      Cary Grant (1904 - 1986) bore little relation in real life to the suave gentlemen he portrayed in films. He gave his monogrammed gifts to Clark Gable, who shared his initials, cut buttons off discarded clothes for reuse and marked the milk level on the bottles with a red pen to be sure his servants did not filch.

      Walt Disney (1901 - 1966) was a demanding boss who took the Protestant work ethic a little too far when he timed his employees' trips to the loo and the vending machines.

      Cornelius Vanderbilt (1793 - 1877) was the richest man in the world but when advised on his deathbed to drink a daily glass of champagne to ease the pain, he asked for soda water instead because champagne was too expensive.

      Michelangelo (1475 - 1564) was probably the richest artist of all time, yet he hoarded every scrap of paper, drawing on both sides, and making obsessive lists of his frugal meals and meagre purchases. When he travelled, he insisted on sharing a single bed with his assistants - for reasons of economy.

      John Paul Getty (1892 - 1976) is notorious as the man who refused to pay his grandson's ransom until the kidnappers sent him the unfortunate youth's ear - and only after he had negotiated the price down from $17-million to $2-million. Even then, he loaned the money to his son, at 4% interest.

      Jacqueline Kennedy Onassis (1929 - 1994) married one of the richest men in Europe but under her designer clothes she wore the cheapest underwear. She used her husband's credit cards to buy haute couture, which she then returned to the shops for a cash refund.

      Seriously, if your company doesn't appreciate your qualities, just change company

    3. Hi Anonymous

      Your final statement was a great reply for a Sunday afternoon and certainly food for thought as it makes an excellent point. Every company has a unique culture and not everyone fits within these cultures. Sometimes you do just have to go elsewhere to have what you bring to the table appreciated and to get ahead.

      Re: possible role models. Hoping that was in jest as none of those fit my values at all.


  3. Ok

    Well here is a suggestion. I think you say that in 3 years under "retirement investing extreme" work will be optional in 3 years

    Therefore stick it with your current company for 3 years then move to another job with a firm that suits your values

    It shouldn't matter to you if its not as successful

  4. hi,
    career wise you ust do what it takes. Remain tech savvy.

    I don't have tv but get all news from Radio 4 and the web. But the tv determines what is important in daily conversation and it can seem odd if your not in the loop

  5. The obvious answer is to form a RetirementInvesting commune.

    It's the next stage in the cycle. Like minded people sharing costs, work, grow your own, etc to reduce living costs and exchange investment ideas.

    Make love.... sorry... money... man not war?

  6. Hi Anonymous

    I like your way of thinking. Not sure if mankind can support that type of system though...


  7. Great post. It is always difficult to let something go, and that is inevitable if you have changed from following a life path typical for your social mileu to something else.

    FWIW you may have to cut out some people who are toxic to your life goals. This gets harder the more time you have shared with them, and is particularly if it is you who has changed, hopefully due to a deper insight in what matters to you.

    I found it worth it for the reduction in cognitive dissonance and stress, but it isn't easy and should always be thought about IMO.

    Oh yes. It will limit your career opportunities. That is exactly what you want, if you want to retire early ;) It cost me a significant amount of soul-searching to be prepared to surrender the rmaining 8 years of my career. It would have cost me a lot more soul searching to have surrendered 20-something years of my career, there would always have been some what-if. OTOH the intervening 15 years are years I will never live again.

    Persist. Ask yourself those questions. Know thyself, and then take the appropriate action, and the best of luck! FWIW you sound like you are on the right track IMO. Early retirement is career-limiting, by definition ;)

    Thoreau had some words of wisdom - "If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away."

  8. Hi Ermine

    Great to hear from you. Regarding moving on from people. You are of course right however as you allude I'm not going to do that until I have explored every option of keeping the friendships.

    Regarding work it was unfortunate that you agree with what I'm thinking particularly given your statements come from fact rather than hypothesis. The difficulty for me is that Retirement is that work simply becomes optional. The problem I have is that my work today is still very enjoyable and so further career progession is important to me thus the quandry.


  9. Forty years ago in my first post-college job I was considered odd by my co-workers because I did not drive or own a TV [the latter especially was considered almost un-American!]. I can relate to not following the conversations about what was on the TV last night.

    The ultimate solution for me was a career change: I took a 30% cut in pay [and bigger cut in stress] to go to work in a small college library. I was not much older than the students, who in those days were a lot less prosperous or materialistic.

    If you can not fit the culture in your current firm or industry you could search for a better match. Alternatively, you could plan on working a little longer, even if only part time.

    You are a very smart guy, which will also make you "different" in many social settings, not just work. I would suggest that you try to [continue to]be a good, friendly, helpful and happy co-worker, including to your "inferiors". I was always accepted in my differences because almost everyone always liked me.

    As for not keeping up with clothing upgrades, make sure that you dress conservatively, don't buy stuff that will go out of fashion quickly - even if it is on sale! ;-)

    Don't overwork frugality, you are doing far better than most and are a great example to us all. Enjoy the trip!

  10. Hi there

    Prescient but is there not a flaw in your underlying plan? Why not work in an industry or job that you love so that "getting out" and retiring asap is not such a big issue? I taught my kids very early on how consumerism works and why you don't need to earn huge amounts to be very happy indeed. I also taught them to follow their passions not to make key decisions based on how each one would move them towards future riches. So the flaw I see here is that whilst you eschew the notion of earning to enjoy the benefits of wealth (because there are some things worth paying good money for) you instead fix solely on a goal of retiring. This presupposes the notion that retiring is good because it means you don't have to do things you don't enjoy i.e. work. If in following your plan, you end up interacting only with people you have little in common with, then maybe you are in the wrong line of work?

    That said I do agree with a lot of your strategy especially in terms of going DIY, minimising costs and understanding precisely what you are investing in (contango excepted!). For very low cost investments check out Cavendish Online, think about how you can get commission rebates on all your investments (boosting returns by 0.5% pa net) and don't overcomplicate things by trying to second guess the market.

    My credentials? Retired at 40 despite giving away half my assets in a divorce and privately educating 3 kids. Multi million pound net worth and 6 figure income without working more than 25 days per year. Would not have posted as Anon but first timer and not sure how else to do it.

    Best of luck

  11. I know exactly how you feel. I'm a junior doctor who spent his 20s living from paycheck to paycheck, with a not insignificant amount of debt. I came to my senses a couple of years ago and since then have paid off nearly all the debt and have cut my frivolous expenses and upped my savings and investments.

    But I still see friends of mine (other junior docs comfortably earning more than 40% above UK average) complain about money being tight, only being able to save a couple of hundred a month etc. I had one guy tell me that its not really worth saving money at the moment, and he would rather put an extra hundred or two a month to overpay his mortgage. Another bought a BMW 3 series (at least £30k or more) and is now paying the no doubt huge monthly installments on it, while at the same time living in a £250k+ house.

    I like these people but I do find it difficult to talk about finances with them, since we have very little common ground....

  12. I have completely changed my life, from 30 years of corporate life with a very good salary, to setting up my own business with a different set of goals.

    My financial objectives are to now earn sufficient income to pay the bills and have 2 holidays a year and of course the weekend wine!

    To achieve this we are making sacrifices with regards to shopping around, even for the basics. Until now we have never counted how much we spent on the weekly shopping, but now we are flitting between Tesco and Lidl's and its actually quite fun!

    The business is in its infancy, but we are on our projected growth curve, so whilst we may not be earning at the rate we did in our corporate lives, we have a much greater balance and fulfilling lifestyle.....oh and the move to Cornwall has helped!

    We are far from reclusive and as far as career goes, we have made a life changing decision not to get back on that greasy pole!

  13. An excellent post that very clearly addresses issues that I also have experienced.

    I am now 51 and no longer need to work - although I still fear 'running out' of money somewhat! So far, there has been no point in worrying about this, as my net worth is still increasing, albeit more slowly. I think worrying shows I am on top of it?

    If I may offer advice, it is this: You clearly have the confidence and ability to tread a different path. Do not confuse that path as being wrong just because it is different to others. Most of the herd are easing their pain with tat and expensive nights out at the expense of their future. Forget about the tat, but a good night out never hurt anyone (it becomes less dignified after 30 though!) Enjoy your nights out if you feel like it, from time to time. A day of reckoning comes to all of us when we instinctively know if we are on the right path or not for the future (for me it was in my early 40's). At that stage it is easy to blot this out if we are on the wrong road, by buying tat and 'partying' more. That's the easy and 'acceptable' way out.

    The 'isolation' you mentioned does ease as you get older, but it is still there, certainly for me. You tend to accept yourself more, warts and all. A good wife and family helped my focus.

    Your website is terrific and you clearly have the self-awareness that will ensure the success of your goals.

    Keep on keeping on.

  14. I wonder whether you still read comments on ancient posts, but here goes: five years down the road, what are your thoughts on your original post? We know that you kept to your course. How did these issues turn out for you, and what actions did you take to address them?

    1. As someone who retired a year ago at 51 I had similar issues with how I presented myself at work as I was in an environment where Rolex and bespoke suits were common choices. I bought both and effectively wore a "uniform" that allowed me to fit into that situation. It was in a way an investment. Likewise I found less in common with old friends and given my FIRE plan nothing in common with my new peers. Like the previous poster I would be very interested to hear an update on how that all worked out for you, though probably you won't get a notification on old posts.